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2018 Social Security benefits should rise, but checks may not

One of the strengths of Social Security is that benefits are adjusted annually to offset increases in inflation, so that the modest, but vital, benefits do not erode over time. Unfortunately, the government’s cost of living adjustment for Social Security is based on inflation experienced by workers and not by retirees and people with disabilities receiving Social Security benefits. Older people and people with disabilities generally experience higher costs of living than workers, so Social Security adjustments are often inappropriately low.

Indeed, Social Security benefits have increased microscopically or not at all in the last several years. For 2018, however, the Medicare and Social Security Trustees project an increase of 2.2 percent.  (We won’t know the actual adjustment for another month.) That adjustment of 2.2 percent would make it the biggest increase in Social Security benefits in six years.

The good news is that if this increase goes into effect, benefits for individuals should increase on average $28 each month The bad news is that millions of people likely will not see that full increase in their Social Security checks  — and some may not see any increase at all because their Part B Medicare premiums may increase.

Most people with Medicare who receive monthly Social Security benefits have their Medicare Part B premiums deducted directly from those Social Security payments.  For these people, Congress has provided that the annual increase in the Medicare Part B premium must be no larger than the Social Security cost of living adjustment.

People whose Medicare Part B premiums did not increase these last few years when their Social Security benefits did not increase–thanks to that so-called hold-harmless provision in the law–will likely now see an  increase in their Part B premium. They no longer will be held harmless. Unfortunately, the Medicare premium increase may absorb part or all of their Social Security inflation adjustment.  Consequently, the 70 percent of people with Medicare who have been paying an average monthly premium of $109 because their Social Security benefits have barely increased over the last few years will likely see no bigger Social Security checks despite the automatic increase.

The solution is three-fold. First, Congress should enact a better, more accurate measure of inflation for people receiving Social Security benefits. In addition, benefits, which are modest, but vital, should be increased. Finally, Congress should expand and improve Medicare and move toward a more efficient health care system, with lower premiums. Though Medicare covers the most expensive part of the population, older adults and people with disabilities, it is much more efficient than private sector health insurance.

With these solutions in place, Social Security benefits will be more adequate, will not erode over time, and will not be swallowed up by expensive health care costs.

If you would like Congress to expand Social Security, please sign this petition.

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3 Comments

  • When the government starts working against the people it is time for the people to take matters in their own hands and ask for a redress of grievances. Now is the time to let your representatives know what is happening and what you want them to do to fix this injustice.

  • …indeed sSocial Security COLA increases are based on the wrong expenses. One of the criteria used is petrol prices which can go up or down. Meanwhile other expenses like healthcare, medications, and housing costs continue to rise, the latter being one of the worst as the rising demand for low/fixed income housing exceeds the supply of units available.

    Here in Portland OR we have ensured the fastest rising rents in the nation for several years. The median rent for a 1 BR apartment is just over 1,500$ a month requiring a salary of around 55,000$ a year to keep at the recommended 33 – 35% of one’s monthly gross. Many such apartments that sprang up in what were once working class neighbourhoods are going for far more than that. Even single rooms in shared situations are averaging 800$ a month (plus an even share of utilities).

    The recession, along with almost unbridled upscale development/gentrification, the Air B&B craze and a mandatory urban growth boundary have all contributed to high housing costs and a shortage of low income housing here. Last year, Section 8 certification was closed indefinitely after over 16,000 households applied for about 9,000 voucher slots in less than five days. What were once affordable neighbourhoods in the inner areas of the city were priced out of the reach of most workers and retirees who have been forced to the outer burbs further from their jobs, necessary services, like clinics and shopping, where transit is poor and in many cases there are not even sidewalks or safe crosswalks on busy streets. Wait lists for low income housing grew longer and some were simply closed.

    I was fortunate to have cleared a wait list last month, but am still paying over 50% of my monthly benefit just to keep a roof over my head. Fortunately I have two years I can still be covered by the state health programme before I have to switch to Medicare and start paying for that. Once that happens I am not sure how I will make ends meet as it will be about 140$ (or more if the premium increases again) extra out of my monthly cheque that is under 1,000$.

    I read about a measure being forwarded (that also had a petition attached) which would increase all Social Security benefits to a minimum of 125% of the national poverty rate for all household, that is tied to raising the cap to 400,000$. For a single retiree, like myself this would mean a monthly cheque of around 1,650$ which would ease the burden of rising medication costs and Medicare premiums. It still would also come under the maximum income requirement for where I am living in (25,0000$/year) and reduce the rent burden from over 50% to around 30% of monthly income. Basically what it would do is allow people on Social Security to actually live rather than barely subsist. It would also ease the burden on programmes like SNAP and Low Income Energy Assistance while giving retirees more direct purchasing power which is what drives the local economy.

    • I agree, the main reason that we didn’t get an increase was blamed on the low fuel costs, however when fuel costs were the highest we didn’t get an increase.

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