No Benefit Increase But Premiums May Rise

There will be no cost-of-living-adjustment for 2016 for the millions of Social Security recipients, disabled veterans and federal retirees for the third time since 2010. The government said that inflation is being pulled down by lower gasoline prices resulting in the flat COLA. The COLA is based on a government measure of inflation and more than one-fifth of the nation’s population, or more than 70 million people, are affected by it.

In addition to the lack of a benefit increase, unless there is intervention by the government, one in seven Medicare beneficiaries will have an increase in their Part B premiums by up to 52 percent next year. This would be the largest increase in Medicare’s history for doctor visits and outpatient care, rising as high as $159.30 a month – possibly even higher – due to an obscure part of the Medicare law that ties the cost of living allowance in Social Security benefits to Part B premiums. The vast majority of beneficiaries, however, will retain the same premium as this year, $104.90 a month. This includes two groups: (1) those paying the standard Part B premiums who have them deducted from their Social Security checks; and (2) recipients having their state paying the Part B premium.

People having to pay a higher premium due to the zero COLA include the following: (1) people in the highest tax bracket and currently paying higher Part B premiums (these will skyrocket from $335.70 to as high as to $509.80 a month); (2) people enrolled in Part B but pay their premiums directly to Medicare; (3) those who pay permanent penalties because they signed up late for Part B; and (4) those who are not yet enrolled in Part B but will sign up in 2016. For greater explanation go to www.Medicare.gov and www.aarpbulletin