Medicare Premium Hike Could Cut Into Social Security Benefits
Millions of U.S. seniors next year will begin to receive smaller Social Security checks because of scheduled increases to Medicare Part D premiums, the AP/Chicago Tribune reports.
Social Security beneficiaries typically receive a cost of living adjustment annually. However, because the current economic recession has resulted in negative inflation, the trustees who oversee Social Security have predicted that there will not be a COLA increase for the next two years.
Social Security benefits by law cannot be decreased, but many beneficiaries will receive smaller monthly checks because their Medicare prescription drug benefit premiums are automatically deducted from their Social Security checks.
Medicare Part B premiums also are automatically deducted from millions of beneficiaries' Social Security checks, but a provision of federal law bars increases to Part B premiums from exceeding COLA increases to Social Security benefits for most beneficiaries. No such provision applies to Medicare drug benefit premiums.
Lawmakers Step In
The National Committee to Preserve Social Security and Medicare has requested that Congress raise Social Security benefits next year, with either a 1% increase in monthly payments or a one-time payment of $150.
Former Rep. Barbara Kennelly (D-Conn.), who heads the advocacy group, estimated the cost of the one-time payment at slightly less than $8 billion, which she said could be funded by raising the threshold of income subject to Social Security taxes (Ohlemacher, AP/Chicago Tribune, 8/24).
On Monday, Sen. Bernie Sanders (I-Vt.) announced that he intends to introduce emergency legislation intended to prevent smaller Social Security checks in 2010 (CQ Today, 8/24).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.