Seniors To Get COLA Increase - And Then Suffer Premium Hike

Seniors To Get COLA Increase - And Then Suffer Premium Hike


By Dell Hill

Seniors, listen up.  I’ve got some good news and some bad news.

First, the good news.  You’re going to get a 3.5% cost-of-living increase in your Social Security benefits starting next January.  

Now, the bad news.  Your Medicare Part “B” premium is also going up, which will wipe out most of that good news above.

Let’s jump ahead of the lame-stream media and give you tomorrow’s news today.
   
           

“The Social Security Administration is expected to announce tomorrow that it will institute a cost-of-living adjustment (COLA) of at least 3.5 percent next year, the first “raise” for Social Security beneficiaries in two years. That’s welcome news for seniors, and a better raise than most private sector employees are expecting in 2012.

After a big COLA spike in 2009 — seniors got a 5.8 percent bump in benefits –  there were no increases in 2010 or 2011. Seniors were angry, and in 2010, the president and Congress sent $250 bonus checks to Social Security recipients to help make up for the lack of an increase.  Many people mistakenly think it was Congress that decided to nix the COLA, but in fact it’s determined by a formula based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W index).  The CPI-W index takes into account average amounts consumers pay for goods and services, and the 2008 spike was based largely on skyrocketing gas prices.  Even though other prices have climbed since ‘08, lower gas prices kept the index below its 2008 level until recently.

There’s some bad news buried in the good news, however.  Many retirees won’t see much of a net increase in their payout because of an increase in Medicare Part B premiums, which are deducted from most recipients’ Social Security checks.  For the past two years, many retirees have seen decreases in their checks, as Medicare premiums ticked higher and the lack of a COLA increase kept their Social Security payout steady.

Next year’s COLA might be the last to be determined based on the CPI-W index. Congress and the debt super committee are analyzing whether the COLA should be based on an index known as the chained-CPI, which reflects how consumers change their spending habits when prices rise.  Use of the chained-CPI would most likely reduce future COLAs as a cost-savings measure.”

As a senior citizen myself, I’d like all of you silver-haired old goats to join me in our Occupy Nursing Homes chant:

“This Sucks....This Sucks....This sucks”