For SS beneficiaries, there will be no COLA increase in 2010 and most likely no COLA increase in 2011. The current CPI used to determine the COLA increases is at -2.13% from the 2008 CPI mark. The CPI must recover the 2.13% and increase byond that point before a COLA increase in SS benefits can be issued. Doing that in 2010 is not likely to happen. As inflation heats up, the FED is going to apply the brakes increasin interest rates.
Medicare B premiums will stay the same for most (about 75%) of SS beneficiaries. This is because of a provision in the law known as Hold Harmless, that does not allow Medicare B premiums to increase more than the SS COLA. No COLA, no Medicare B increase.
One big exception to the Hold Harmless provision is, Medicare D is not included in the Hold Harmless provision. Thus Medicare part D premiums are likely to increase.
Other SS beneficiaries that will see an increas in their Medicare B premiums are those taxpayers who had an AGI greater than $85,000 ($170,000 MFJ) in 2008 and will pay a higher medicare B premium because of their higher income. This surcharge can be challenged. If you are subject to a Medicare B surcharge and have a legitimate life changing event, you should submit a challenge.
Others that do not have the Medicare B premium deducted from their SS benefit but pay it with a check or ACH transfer may see an increase in their Medicare B premium in 2010.
One other category of SS beneficiaries that will have Medicare B premium higher than the $96.40 are new enrollees. Retirees that begin to have the Medicare B premium deducted from their SS benefit during 2010 will have a higher Medicare B premium. However if there is no SS COLA for 2011 they would maintain the same Medicare B premium for 2011. The Medicare B premiums for this group is estimated to be about $106 per month.
For 2010, Congress is also considering a bill for relief from Medicare Premium increase for the approximately 7% of beneficiaries who did not get SS in 2009 or whos premium is based on their 2998 income tax return and is due for the surcharge. That would leave the Medicare increase to Part D.
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