WASHINGTON, Oct. 15 (UPI) -- Some 65 million retired and disabled Americans are about to be hit with a double whammy -- the Social Security Administration announced Thursday there will be no annual cost-of-living benefits increase in 2016 but there may be an increase in Medicare costs.
For the first time in five years, there will be no annual cost of living adjustment, or COLA, increase because the inflation rate hasn't risen, mostly due to low gas prices. The absence of the increase means many older people could face higher Medicare costs.
"You've got all kinds of people receiving COLA-adjusted retirement benefits. This is going to be another blow to their retirement income," said Mary Johnson of The Senior Citizens League. "It's a huge amount over a lifetime."
Congress enacted annual increases in Social Security in 1972, when inflation was high. The federal "hold harmless" law says the cost of higher Medicare Part B premiums cannot be passed on to most people when there is no Social Security COLA. That means 70 percent of Medicare recipients will pay the same in 2016 for Medicare Part B as they did in 2015, $104.90 per month.
The remaining 30 percent, however, could see a sharp increase unless Congress changes the law or the Centers for Medicare and Medicaid Services decides against the increase. The increase could come to 2.8 million new beneficiaries, 1.6 million whose premiums aren't deducted from their Social Security checks and 3.1 million people with higher incomes. Those subject to the increase will pay $159.30 ($318.60 for married couples) a month.