Claim: Social Security recipients will get no COLA increase in 2010 but will pay higher Medicare premiums.
Example:[Collected via e-mail, September 2009]
For the first time in history, the Democratic Congress will not allow an increase in the social security COLA (cost of living adjustment). In fact, The Henry J. Kaiser Family Foundation predicts there may not be any COLA for the next three years.
However, the per person monthly Medicare insurance premium will be increased from the 2009 premium of $96.40=2 to $104.20 in 2010 and to $120.20 for the year 2011.
Send this to all seniors that you know.
Remind them to not vote for the incumbent senators and congressmen in the 2010 and the 2012 elections.
Origins: Since the mid-1970s, Social Security has provided for cost-of-living adjustments
(COLAs) in order to help keep benefits in line with the rate of inflation. The last
COLA increase, which took effect in December 2008, boosted Social Security benefits by 5.8%.
As of September 2009, the Social Security Administration is projecting that there will be no cost-of-living increases for the next two years. This is not because "the Democratic Congress will not allow an increase in the social security COLA," but because COLA increases are based on a formula which is tied to specific economic indices (primarily the Consumer Price Index for Urban Wage Earners and Clerical Workers), and the application of that formula under current conditions does not call for an increase:
The Social Security Administration projects no cost-of-living increases for the next two years because the adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels.
It is true that several members of Congress have introduced bills that would provide for Social Security increases regardless of the COLA formula, bills which may or may not pass. If none passes, 2010 would be the first year without a Social Security increase since cost-of-living adjustments were implemented in the mid-1970s.
It is also true that a small group of Medicare recipients might see an increase in their Medicare Part B premiums in 2010:
Social Security COLAs and Medicare Part B premiums have been tied together for years because most seniors have their Medicare premiums deducted from their Social Security payments.
With no Social Security COLA, the vast majority of Medicare recipients already are exempt from premium increases for Part B, which provides coverage for doctor's visits. However, a small group of seniors would face increases. The standard premium is projected to go from $96.40 a month [in 2009] to $104.20 a month in 2010.
However, on 24 September 2009 the House of Representatives voted to eliminate premium increases for Medicare Part B in 2010:
The House voted 406 to 18 to eliminate all premium increases for Medicare Part B, which provides coverage for doctor's visits. The bill now goes to the Senate, where the Finance Committee is expected to take it up soon, though no hearings were scheduled.
Lawmakers said older Americans shouldn't have to pay higher Medicare Part B premiums because they are not expected to get a cost of living increase from Social Security. Most seniors have their Medicare premiums deducted from their Social Security payments.
Under the law, the vast majority of Medicare recipients already are exempt from Part B premium increases whenever there is no increase in Social Security payments.
Also, in October 2009 President Obama proposed that Congress provide a one-time extra payment of $250 to Social Security recipients in 2010 to offset the absence of a COLA increase:
President Obama urged Congress to provide an extra $250 each to about 57 million seniors, veterans and people with disabilities as the Social Security Administration prepared to announce that there would be no cost-of-living raise in 2010.
Obama's proposal calls for a one-time payment sometime [in 2010]. It would be equivalent to about 2% of the annual benefit for the average Social Security retiree, senior administration aides said, and would also go to Supplemental Security Income recipients, veterans, railroad retirees and government retirees. Each person would be eligible for just one $250 payment, even if he or she qualified under more than one program.
Last updated: 14 October 2009
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