The Social Security Administration recently confirmed that there will be no cost of living increase for 2016.
Michael Cohn, in an article in Accounting Today, states that there are nearly 65 million recipients of monthly Social Security and Supplementary Social Security Income. A decline in oil prices has driven down inflation for many consumer goods that the federal government includes in its cost of living computation. This is the reasoning for there being no increase.
The Social Security Act offers an increase in Social Security and SSI benefits if there is an increase measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. By comparing the third quarter CPI-W for 2014 to the third quarter CPI-W for 2015, it was determined that there was no increase.
The Department of Health and Human Services has not yet announced Medicare premium changes for 2016. However, if such likely increase happens, 30% of Medicare recipients could experience a hike in premiums. While 70% of Medicare recipients are protected under a “hold harness” provision that protects them from an increase in Medicare Part B premiums subject to Social Security increase, the other 30% are unprotected.
Information about Medicare changes for 2016 will be available at www.medicare.gov when available.
Author: Sherri VanArendonk