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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