PHILADELPHIA (CBS) - The Social Security Board of Trustees says there may be a cost of living increase in payments to retirees next year. It would be the first such increase since 2008 but retirees might end up paying the entire amount to increased Medicare premiums.
Cost of living adjustments are tied to the consumer price index. That has not gone up in three years, largely because of the drop in housing prices tied to the recession, so Social Security payments have been flat.
At the same time, however, health care costs have escalated and Medicare has gotten more expensive but retirees haven’t had to pay the increase.
“Federal law says that when there are no Social Security cost of living increases, recipients cannot have their Medicare increased,” said Ray Landis of AARP.
Landis says when Social Security payments increase, recipients will have to pay the higher Medicare premiums, thus their cost of living raise could be totally wiped out.
One saving grace is that the premiums can’t rise any higher than the cost of living increase. At the very least, recipients will not lose money on the deal.
Reported by Pat Loeb, KYW Newsradio