Reported by Stephen Ohlemacher of the AP yesterday:
The government is projecting a slight cost-of-living adjustment for Social Security benefits next year, the first increase since 2009. But for most beneficiaries, rising Medicare premiums threaten to wipe out any increase in payments, leaving them without a raise for a third straight year.
About 45 million people — one in seven in the country — receive both Medicare and Social Security. By law, beneficiaries have their Medicare Part B premiums, which cover doctor visits, deducted from their Social Security payments each month.
When Medicare premiums rise more than Social Security payments, millions of people living on fixed incomes don’t get raises. On the other hand, most don’t get pay cuts, either, because a hold-harmless provision prevents higher Part B premiums from reducing Social Security payments for most people.
David Certner of AARP estimates that as many as three-fourths of beneficiaries will have their entire Social Security increase swallowed by rising Medicare premiums next year.
It’s a tough development for retirees who lost much of their savings when the stock market collapsed, who lost value in their homes when the housing market crashed and who can’t find work because the job market is weak or they are in poor health.
Though this is frustrating for all retirees facing this dilemma, it is certainly not shocking. Our new healthcare laws, as they evolve, will cause the cost of Medicare to rise at an even greater rate. I hope that this wake up call will allow the public consensus to alter on what is possible as far as entitlements, as well as what is sustainable. We most definitely need reform. Ideally repeal of the Healthcare bill and a revamping to have realistic change that does not create detriments and astronomical costs, both fiscally and intrinsically.