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PrintOctober 16, 2009
The Medicare vise
While many are upset that the government is not increasing Social Security payments for the first time in some thirty years due to deflation, and while focusing most recently on the $250.00 handout to recipients, commentators have failed to note the full extent of what is happening. This has been known for a few months but has been under the radar of most analysts.
The concealed issue, lost in the outrage of no cost of living increase, is the fact that there will be an actual decrease in Social Security payments received.
Here's how it works: Medicare is not free. It is paid for by a deduction from Social Security payments to each recipient. Think of it as an insurance premium that you pay for Medicare Part B. Recipients can, if they choose, take supplementary insurance. That is not the issue here.
The government is increasing the takeout, the deduction, for Medicare Part B for millions of beneficiaries. Think of it as a cost-of-living adjustment for Medicare, based on its rising costs. The reason is claimed to be an increase in medical costs. In other words, the government is charging Social Security recipients (they are not all seniors so I don't use that term) more as a cost of living increase while, at the same time, denying Social Security beneficiaries a cost of living increase on the basic benefit.
The net effect is that people receiving Social Security will receive a decrease in funds received.
The House took some steps to rectify the problem in late September. Yet, under the House bill the amount of coverage for hospital stays would decrease. That will result in an increase in premiums for supplementary insurance purchased privately. New enrollees in Social Security will not be protected from the increases.
On the one hand there will be no increase in Social Security payments for the next two years because there was no increase in the cost of living while, on the other hand, there is an increase in the Medicare deduction for both years due to an increase in the cost of living for Medicare!
Ain't government grand?
