Social Security COLA Announced-And It’s MINISCULE!

The Social Security Administration has announced that the 2017 Cost of Living Adjustment (COLA) will be three tenths of one percent (0.3 percent). For a retiree receiving the average social security payment, the increase will be $5 a month.

Because there is a linkage between the Social Security COLA and Medicare Part B premiums, it is possible that the Medicare premium could be increased by an amount equal to the COLA. For the vast majority of Medicare recipients (70%), there cannot, by law, be an increase in premium higher than the Social Security COLA. Retirees in this category are currently paying a monthly premium of $104.

The remaining 30% of Medicare recipients are currently paying a higher monthly premium of $121. Retirees in this category are: new enrollees in 2016, Medicare beneficiaries not yet receiving Social Security, and those with a higher income ($85,000 single/$170,000 married) subject to the income related monthly adjustment amount (IRMAA). These recipients will most likely see a significant monthly premium increase in 2017. Stay tuned.

The 2017 Medicare rates for all recipients will be announced in a month. You may recall that in this year’s state budget, Governor Cuomo had proposed capping the NYSHIP reimbursement of Medicare premiums at the $104 level. RPEA vigorously opposed that proposal, and was successful in having the legislature delete it from the final budget. That victory is even more important now, as premiums will increase.

Additionally, RPEA has written to members of the New York Congressional Delegation, requesting that the consumer index used to determine the COLA be changed to one that more accurately reflects the expenses of retirees, which are heavily influenced by medical costs. Congressman Engel responded that he is sponsoring such a bill.

RPEA…Your First Line of Defense!