The Social Security Administration announced Friday that next year’s Social Security cost of living adjustment (COLA) will be 2.0%. That means an increase of $25 per month for the average beneficiary.
According to the nonpartisan Kaiser Foundation, however, this will not be enough to offset the rise in Medicare Part B premium costs for 2018.
Coverage for Medicare Part B is optional, but 91 percent of Medicare beneficiaries are signed up for it. The program covers physicians’ care, outpatient care, certain medical equipment, laboratory tests, some health home services, and other care for patients. According to a Senior Citizens League study, retirees have lost one-third of their buying power since 2000 because COLA increases haven’t been able to catch up with skyrocketing health care and housing costs. Researchers expect Part B premiums to increase an average of 5.4 percent each year between 2017 and 2024.
“Following two years of no and low cost-of-living adjustments (COLAs), today’s announcement was eagerly awaited by millions of Americans who rely on the increase to keep up with the rising prices for food, housing, gas and medical care,” said Richard Thissen, president of the National Active and Retired Federal Employees Association (NARFE).
“Unfortunately, the 2.0 percent COLA provides only partial relief and serves as a reminder that our method for calculating the increasing cost of goods and services is out of sync with the reality faced by federal annuitants, Social Security recipients and military retirees. Our nation’s seniors spend more than twice as much on medical care than the population measured by the current formula to calculate COLAs, the CPI-W. Congress must act to implement a new formula that adequately measures costs incurred by seniors. …”