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PrintMay 3, 2009
No Social Security COLA for this year or next
Seniors will be in for a shock when they discover that because of low inflation, there will be no cost of living adjustments to their social security checks for this year and probably next.
Not only that, but no COLA means that some seniors will see their Medicare Part B premiums skyrocket as Robert Pear of the New York Times explains:
A freeze in Social Security benefits would have major implications for Medicare because the COLA, in effect, puts a cap on premiums for Part B of Medicare, which covers doctors' services.
If there is no cost-of-living adjustment for Social Security, about three-fourths of beneficiaries will not see any change in their basic Part B premiums, federal officials said. But some beneficiaries do not have this protection and could face substantial increases in their Part B premiums.
In addition, millions of beneficiaries could see higher premiums for drug coverage, provided under Part D of Medicare.
Social Security and Medicare trustees will describe the outlook for benefits and premiums in their annual reports this month.
Congress may step in and mandate the COLA's anyway. They've done it before in the 1980's when inflation dropped below 3%. And since seniors are the one block of constituents who vote in huge numbers, Congress is not likely to forget that as they seek to shore up the income of social security recipients.
