No rise in social security benefits in 2016

As expected, the Social Security Administration announced Thursday – for just the third time since the automatic adjustments were adopted in 1975 – that some 65 million Social Security recipients will not receive a cost-of-living adjustment (COLA) in 2016.

In addition to not seeing an increase in their benefits, the lack of a Social Security COLA will also cause a flap in the Medicare program because, by law, the cost of higher Medicare Part B premiums cannot be passed on to most beneficiaries when they do not get a raise in their Social Security benefits, according to the Center for Retirement Research.

According to Social Security’s “hold harmless” law, 70% of Medicare beneficiaries will pay the same Medicare Part B premium in 2016 as they did in 2015, $104.90.

But 30% of Medicare beneficiaries could see their Medicare Part B premium rise more than six times the rate of health-care inflation, unless Congress changes the hold harmless law or the Centers for Medicare and Medicaid Services (CMS) decides against the increase.

At the moment, most of the not-held-harmless Medicare beneficiaries will see their premium rise 52% to $159.30 per month ($318.60 for married couples). But individuals whose incomes exceed certain thresholds (about 5% of all Medicare beneficiaries), could see premiums rise to anywhere from $223.00 per month up to $509.80 (or $446 to $1,019.60 for married couples). What’s more, the Medicare Part B deductible will rise from Read Medicare Part B premiums to rise 52% for 7 million enrollees.

“The Part B premium for 2016 will be announced this fall, as it usually is,” says a CMS spokesperson. “The law does not give HHS the authority to extend the hold harmless provision to all Part B enrollees.” Over the past two years, CMS announced Part B premiums in October.

The culprit behind the lack of a COLA adjustment: Low inflation. The consumer price index for Urban Wage Earners and Clerical Workers (CPI-W) did not rise enough in the base period – the 12 months ended September 2015 – used to determine the COLA, according to a report by the Center for Retirement Research at Boston College.

The government said Thursday that inflation, as measured by the CPI-W, decreased 0.6% over the 12 months ending September. That means the CPI-W for the year ending September was below its level from the previous year. For Social Security beneficiaries to receive a COLA, the CPI-W must be above the previous year’s level. Social Security recipients did not receive COLA adjustments in 2010 and 2011 because of low inflation.

The real culprit here is the "market basket" they use to determine rate of inflation for old folks. You'd be amazed at what's included.

Add to that, certain people plan to hold Social Security & Medicare hostage in the raise the spending cap fight. Sounds like I need to call and yell at my senator AGAIN.

Flamingo, does your Senator listen? If so, please tell me your secret. The two from my State are deaf on both ears, unless the Koch brothers are calling, those guys have their undivided attention.

Just FYI, here's what's included in that "market basket":

"What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

   FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
   HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
   APPAREL (men's shirts and sweaters, women's dresses, jewelry)
   TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
   MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
   RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
   EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
   OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses)."

(information courtesy of Senor Google: bold marking by me)

If that doesn't include whole lot of NON necessities of life, many of which SS recipients certainly can't use and don't need.............I'm a monkey's aunt.  IMO, there should be a "market basket" of essentials, which for sure shouldn't include items like jewelry and tobacco, among others.
We should be yelling at our Congressmen.

I would be curious if this freeze also applies to welfare payments and other benefits

Lucky Girl wrote:Flamingo, does your Senator listen? If so, please tell me your secret. The two from my State are deaf on both ears, unless the Koch brothers are calling, those guys have their undivided attention.

Only one listens, so I rarely bother to call him. The other is also a Koch brothers Ken doll, so I call to annoy him and his staff.

artesialulu wrote:I would be curious if this freeze also applies to welfare payments and other benefits

Senor Google didn't come forth on that for me; why don't you give it a try?

Mainly due to gas prices in US. It was over $3 a gallon a year ago; just over $2 last month. CPI is comparing Sept. 2014 to Sept. 2015.

Anyone here care to whip out a calculator and convert Pemex prices to US dollar/US gallon for the same timeframe? It's beyond my math skills.

1 US gallon = 3.78 L

RVGRINGO wrote:1 US gallon = 3.78 L

That's the EASY part

Finding historic Pemex price in Sept 2014 and the historic peso:USD price for that month, versus Sept. 2015 will take a bit of Senor Google's time.

Well Mexico has tried to help the US expat retirees living in Mexico by letting the peso slide downwards this past 12 months.   Much more than the inflation on local goods and services. Just don't buy imports.

gringal wrote:

artesialulu wrote:I would be curious if this freeze also applies to welfare payments and other benefits

Senor Google didn't come forth on that for me; why don't you give it a try?

From what I can tell the total welfare spending will go up a little according to the bar graph shown but for me it is hard to interpret since it is not as revealing as social security.  Here is a link for those who can figure it out.  If I read it correctly (probably not) the percapita increase in welfare is some over $1,400+ for 2016.  Good luck and let us know your conclusions.  It appears the gov makes it difficult on purpose.

http://www.usgovernmentspending.com/per_capita

slainte39 wrote:Well Mexico has tried to help the US expat retirees living in Mexico by letting the peso slide downwards this past 12 months.   Much more than the inflation on local goods and services. Just don't buy imports.

Aww......that was sweet of them.