Retirees and those with disabilities, according to the Centers for Medicare and Medicaid Services (CMS), should prepare for another year with no increase in Social Security payments.
CMS is projecting a slight cost-of-living adjustment for Social Security benefits next year, the first increase since 2009. But for most beneficiaries, rising Medicare premiums threaten to wipe out any increase in payments, leaving them without a raise for a third straight year.
About 45 million people - one in seven in the country - receive both Medicare and Social Security. By law, beneficiaries have their Medicare Part B premiums, which cover doctor visits, deducted from their Social Security payments each month.
When Medicare premiums rise more than Social Security payments, millions of people living on fixed incomes don't get raises. On the other hand, most don't get pay cuts, either, because a hold-harmless provision prevents higher Part B premiums from reducing Social Security payments for most people.
David Certner of AARP told the Associated Press, that estimates that as many as three-fourths of beneficiaries will have their entire Social Security increase swallowed by rising Medicare premiums next year.
This will make it more difficlut for retirees to afford Medicare supplement insurance coverage. This is particularly true since many retirees lost investment savings when the stock market collapsed, and also lost value in their homes when the housing market crashed. Many then needed to return to work but had difficulty finding opportunities because the job market was so troubled.
The impact on the Medicare and retiree insurance market could be dramatic. Insurers in these markets may see reduced sales and lost income impacting those insurer's bottom lines.
