WASHINGTON – That didn’t last long. About 55 million Social Security recipients will next year get their first increase in benefits since 2009 — a 3.6 percent raise. But higher Medicare premiums could erase a big chunk of it.

For some, higher Medicare Part B premiums could wipe out as much as a fourth of their raise from Social Security, according to projections by the trustees who oversee the programs.

Medicare is expected to announce 2012 Part B premiums as early as next week. The premiums, which cover doctor visits, are deducted automatically from monthly Social Security payments.

The Social Security Administration announced the pay increase Wednesday, offering a measure of comfort to millions of retirees and disabled people, many who have seen their retirement accounts dwindle, home values drop and out-of-pocket medical costs rise in the years since their last raise.

Starting in January, 55 million Social Security recipients will get increases averaging $39 a month, or just over $467 for the year. In December, more than 8 million people who receive Supplemental Security Income, the disability program for the poor, will get increases averaging $18 a month, or about $216 for the year.

In all, one in five U.S. residents stand to get a raise from the cost-of-living adjustment, or COLA.

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Advocates for seniors say the raise is welcome and overdue.

“It may be cold comfort, however, once they see just how high next year’s Medicare premiums will go,” said Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.

The annual cost-of-living adjustment is tied to an inflation measure released Wednesday. The measure produced no COLA in 2010 or 2011 because inflation was too low.

Monthly Social Security payments average $1,082, or about $13,000 a year.

Medicare Part B premiums must be set each year to cover 25 percent of program costs. By law, they have been frozen at 2009 levels for about 75 percent of beneficiaries.

 


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