2020 Social Security COLA Increase

[GailL1]

1.6% 

No word yet on what Medicare Part B premiums will be - but I'd say that the increase in this cost will pretty much absorb the entire COLA - thank goodness, it can't be more by law.

But, if not, DON'T SPEND IT ALL IN ONE PLACE.

[kenori23]

It seems like each time they give us more, they take back a chunck on medicare premiums.  It sure would be nice see a nice increase stay as a nice increase. Bah!

[GailL1]

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@kenori23 wrote:

It seems like each time they give us more, they take back a chunck on medicare premiums.  It sure would be nice see a nice increase stay as a nice increase. Bah!

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I see that you do not understand the Medicare "Hold Harmless" clause in the law.

https://www.investopedia.com/terms/m/medicare-hold-harmless-provision.asp 

What Is the Medicare Hold Harmless Provision?

The Medicare hold harmless provision prohibits Medicare Part B premiums from reducing the amount of an individual’s Social Security benefits year over year. This limits the rise in Medicare Part B premiums paid by Social Security beneficiaries in a given year to no more than the cost of living increase provided by Social Security. The hold-harmless provision, therefore, limits the financial strain certain Social Security recipients may experience should Medicare costs rise.

So the amount of the Part B premium increase in any given year will never be more than the COLA amount given, if any.

There was a year, maybe two, during the Obama Admin. when there was NO COLA and thus NO Part B premium increase - however, sooner or later that gets caught up by them taking more of a COLA but never more than the COLA.

[kenori23]

Thank you Gail.  No I didnt know.  I understand the logic behind it.  Does SS ever give increases to cope with cost of living inflation ?  Pardon me if this seems ignorant.

[GailL1]

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@kenori23 wrote:

Does SS ever give increases to cope with cost of living inflation ?  Pardon me if this seems ignorant.

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Actually, that is what the COLA is suppose to represent - "Cost of Living Adjustment".

However, it is based on the country as a whole (from September to September).

The COLA based on this CPI formula covers more than just seniors - THE COLA also is given to many Veteran income benefits and to some Federal employees too, maybe others too.  It also has the rationale that in many categories that people have a choice of down-sizing their cost somewhat.

Even adding a medical expense calculation to seniors in this computation only gives a slightly higher amount year to year when there is inflation; over the long term it has some additional accumulation.

This just goes to show you that we live in a country that is vastly different in make-up and sometimes I wonder why we do certain things at the national level when it is the more local area that makes a bigger difference.

Read the link that @cat0w linked - it explains it in more detail especially the links at the bottom of the page entitled COLA Fact Sheet & COLA Publication.

[kenori23]

Thank you Gail. That was very informative. 

Oriel

[cat0w]

@kenori23  You asked " Does SS ever give increases to cope with cost of living inflation ?"

That's what this topic is about. Look at this, https://faq.ssa.gov/en-US/Topic/article/KA-01951

[SIMPLEGAL]

GailL1...the COLA increase doesn't come close to offsetting the new health insurance premium I will be paying next year; An increase of $40 a month plus I have a $7000 deductible which means every visit to the doctor comes out of my pocket.  It adds up when you have physical therapy twice a week...but I consider myself fortunate to be improving thanks to all the medical professionals.  Social Security is a wonderful subsidy that I am grateful to be able to collect.

[GailL1]

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@SIMPLEGAL wrote:

GailL1...the COLA increase doesn't come close to offsetting the new health insurance premium I will be paying next year; An increase of $40 a month plus I have a $7000 deductible which means every visit to the doctor comes out of my pocket.  It adds up when you have physical therapy twice a week...but I consider myself fortunate to be improving thanks to all the medical professionals.  Social Security is a wonderful subsidy that I am grateful to be able to collect.

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You must not be on Medicare yet - not Original Medicare and not a Medicare Advantage plan either.

If this is an employer/union plan for Retirees (65 and over) - You need to start shopping around unless it is special someplace else in benefits.

[GailL1]

@SIMPLEGAL 

Medicare Part B premiums are also going UP in 2020 -

For most people the new premium in 2020 will be $ 144.60 per month.

AND if you are "fortunate" enough to be a high-income senior, those IRMAA premiums are also increasing.