Part B premiums may increase for some beneficiaries

What is a COLA?
A Cost-of-Living-Adjustment is an increase in Social Security payments based on an increase in the cost of living. It is determined using the Consumer Price Index, which measures rates of inflation.

Since 1975, Cost-of-Living-Adjustments have been calculated annually, and result in an increase in Social Security payments. For the third time, the COLA will not increase. Each time has been during the Obama administration.

Why won’t there be an increase?
This year, there won’t be an increase because the cost of living didn’t increase. It actually decreased, according to the Consumer Price Index, because of falling gas prices.

Economists say that even though the price of medical care has increased, “consumer prices for a range of goods from food to housing have not risen enough overall to produce an increase in benefits, and have dropped from a year ago,” the Washington Post reported.

What does it mean?
Social Security’s benefit will remain the same for the next year.

If you saw our newsletter on the Medicare Part B premium increase, you know that the increase was dependent on a COLA adjustment. Now that we know there won’t be COLA adjustment, we know that Part B premiums won’t increase for 70% of Medicare beneficiaries. We also know that they could increase substantially for the other 30%, including those new to Medicare in 2016, those whose Part B is not paid through Social Security, and those with single incomes over $85,000 or joint incomes over $170,000. This issue of our newsletter has more detailed information about the premium increases.

The White House commented that they were concerned about the “unintended policy consequence resulting from the formula of calculating cost of living adjustments,” and has reached out to Congress in search of a solution.

Members of Congress have submitted bills aimed at halting the Part B premium increase, and dozens of groups representing seniors have been lobbying for their passage.

What can I do?
If you don’t want the Medicare Part B premium increase, call your congressman.


Cost-of-Living-Adjustments over the past decade. This chart was made with information from

For more on COLA calculations and this year’s numbers, see this page on the Social Security Administration’s website.

For more on the details of this year’s COLA, see this informative article from the Washington Post.

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