Mark Miller writes for his subscription blog, RetirementRevised.com on how cost of living adjustments to Social Security are far smaller than Medicare premium cost increases. Medicare’s costs increase far faster than the rate of inflation. Only if Congress increases Social Security benefits can most older Americans maintain their standard of living from one year to the next.
As we have reported, your Social Security benefit will rise 1.3 percent in 2021 or an average of $20 a month. The 2021 standard Medicare Part B monthly premium will increase $3.90 to $148.50 for anyone who did not earn more than $88,000 a year in 2019.
People with smaller Social Security benefits will likely not see an increase or see only a de minimis increase in their Social Security benefits. Fortunately, thanks to a “hold harmless” provision in federal law, people cannot see their Social Security checks decrease. So, no one with incomes under $88,000 will see an increase in their Medicare premium larger than the increase in their Social Security benefits.
The average Social Security benefit increase in the last 12 years has been just 1.4 percent, even though average Medicare cost increases have been far higher. And, Social Security increases over the past ten years have been painfully small. In three of those years, Social Security benefits did not increase at all. In one of those years, benefits increased three-tenths of a percentage point.
Because Social Security cost-of-living increases are tied to a basket of goods whose costs do not increase as quickly as health care costs, and because older adults use more health care than younger people, most older adults struggle to maintain their standard of living as they age. To help address this issue, Congressman John Larson’s Social Security 2100 Act would increase Social Security benefits by 2 percent; and, it would reduce taxes on Social Security benefits.
This year, the Medicare premium is rising $3.90, about 25 percent of what it otherwise would have increased. Congress limited the amount the 2021 premium could increase in a COVID relief bill.
If you want Congress to increase Social Security benefits, please sign this petition.
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