That’s the effective cost of living adjustment for a typical retired Social Security recipient, rather than 5.9%, because of the latest hike in Medicare premiums.
The standard monthly premium for Medicare Part B, the portion of the federal health insurance program that most recipients pay for, will be $170.10 next year, up $21.60 or 14.5% from this year, the Centers for Medicare & Medicaid Services announced late Friday. The center said part of the increase—the highest percentage hike since 2016—is related to the COVID-19 pandemic and part stems from uncertainty over certain drug costs. Specifically, it cited significant uncertainty over possible coverage of clinician-administered Alzheimer’s drugs like Aduhelm.
The hike in premiums means the 5.9% cost of living adjustment retired Social Security recipients will receive next year—the largest since 1982 because of this year’s soaring inflation—won’t actually feel as big. For instance, the average monthly benefit for retirees is set to increase by $92 to $1,657, but with an extra $21.60 each month going to Medicare Part B, it’s effectively an increase of $70.40, or 4.5%, instead.
That’s particularly bad news when consumer price inflation is accelerating like it is. Inflation for the 12 months through October was 6.2%, the fastest rate since 1990.
“Inflation was eroding the buying power of people living on fixed incomes, even before the healthcare portion came out,” said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League. “If prices don’t start moderating soon, even a 5.9% COLA won’t be enough next year.”
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