Category: Financial and taxes in retirement
October 19, 2011 — It was announced today that starting in January 2012 some 55 million Social Security beneficiaries will receive their first cost of living adjustment (COLA) in almost 3 years. The increase will be 3.6%, or about $516 year for the average recipient. Some seniors are upset that the increase doesn’t match the corresponding health care cost increases they have been paying, and they might have a point, since they are heavy consumers of that service. However, the government calculates the COLA based on a range of costs, some of which do not typically affect seniors as much (e.g.; gasoline or new cars).
The Urban Institute estimates that about 2/3rds of Americans rely on Social Security income for more than half of their income. Some 35% depend on the benefit for 90% of living expenses. It posits, however, that the economic downturn has not affected those over 65 as much as it has younger people, who obviously rely more on jobs for the bulk of their income.
Part B Premium Increase Less Than Expected – Actually Decreases for Some
Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and other items. In 2012, the “standard” Medicare Part B premium will be $99.90. This is a $15.50 decrease over the standard 2011 premium of $115.40 paid by new enrollees and higher income Medicare beneficiaries and by Medicaid on behalf of low-income enrollees. And as the U.S. Health & Services Commission points out, “Thanks to the Affordable Care Act, people with Medicare also receive free preventive services and a 50 percent discount on covered prescription drugs when they enter the prescription drug “donut hole.” This year, 1.8 million people with Medicare have received cheaper prescription drugs, while nearly 20.5 million Medicare beneficiaries have received a free Annual Wellness Visit or other free preventive services like cancer screenings.” Part B deductibles will decrease by $22.
Could this COLA be rescinded?
Most experts think not. At this point the increases appear “baked in”.
Social Security COLA page
10 Things You Need to Know About Social Security – Before You Start Taking It
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Posted by John Brady on October 19th, 2011
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