Medicare

Medicare Part B premium increase in 2012 likely to fully offset Social Security COLA projected at 1.2%. This is a good lesson for anyone planning on retiring.

ALERT: Social Security COLA for 2012 to be 3.6%. It’s official! October 19, 2011

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According to the Trustees projections, Social Security recipients may see a 1.2% cost of living adjustment in their monthly benefit in 2012. However, that increase will quickly disappear thanks to growing Medicare premiums.

The “hold harmless” provision which states that the Social Security benefit can’t decrease as a result of a Part B premium increase assures that most Americans receiving Social Security will not see their benefit go down, but neither will the benefit increase, for the third year in a row.

Higher income beneficiaries are not protected by the hold harmless provision and will see an increase in Medicare premiums and a resulting decrease in their net Social Security benefit.

Those new to Social Security and Medicare in 2012 will see the effects of all Part B premium increases over the last three years.

If you would like to see a more detailed explanation of all this check out the Kaiser Family Foundation Report.

Individuals paying for Medigap coverage or for employer based Medicare supplemental coverage will see a further reduction in their net income as a result of increases in those premiums. 

There is a lesson to be learned here for those who are not yet retired.  Health care costs and premiums will continue to consume an ever-increasing portion of your retirement income and those costs are largely income insensitive meaning that if you have a retirement income of $30,000 or $300,000 your health care costs will be very much the same.  The time to plan for this is now, now, now!</

Categories: Medicare, Social Security

33 replies »

  1. Surprised that people have no clue about their own government – we know what the Part B premiums will be until 2021, at least a guideline along with the National Base Premium for Part D too.

    By the way the cola’s for Social Security are also known too

    Just find the trust reports & see page 229 for Medicare and page 109 for SSI

    It’s not that difficult people

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    • Not exactly. the references you site are best guest estimates of the future premiums and the SS COLA. The actual numbers are based on formulas that consider experience and in the case of COLA, the CPI-W for the third quarter each year. However, the estimates are close if not cast in stone.

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  2. True story….I have worked all my life and lost my job in October of 2010. Because I was 65 I applied for heath insurance with medicare and paid the premiums which were $110./mo. I continued to look for work and drew my unemployment. I used my severance pay to pay off my bills and to compensate my living expenses for the following year. Since I was unable to find work I applied for retirement in Sept of 2011 and started drawing my social security in Oct. In November of 2011 I received a letter from SS that because my income was more in 2010 (inflated because of severance pay) that my medicare premium would increase from $110 to $259.70!!!!! Any ediot could plainly see that over the years my income had remained steady with the exception of the last year. If nothing is done I can expect to pay this inflated amount for the rest of my life. I have worked hard, I am divorced and raised 4 children, there were times I would have been better off on welfare but I don’t believe in letting the government support you. There were many hard years when I didn’t know how I would put food on the table. I feel betrayed by my own country. I have appealed this decision with no response – I have called Social Security and was told that someone would get back to me with no response!!!

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    • You are not locked into the higher premium for life. The Medicare income premium you pay is based on your gross income in the second year before the current year. So your primium or 2012 is based on your income fo 2010. However, there are exceptions, retirement being on of them. So, if you retired in 2011 and your income dropped, then your 2012 premium will be based not on 2010 but 2011 income. go to your local SS office.

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  3. So I’m guessing by now all you people on this blog know what bunk it is. The SS COLA is 3.6% and the MASSIVE Medicare raise is $3.50. Get the actual facts people. Don’t depend on bloggers.

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  4. Unfortunately, most people who respond to these blogs and various e-mailed warnings depend on one source for all their information.They believe, “If it’s posted on the internet it must be true.” CHECK THE FACTS PEOPLE, AND DON’T BELIEVE EVEYTHING YOU READ ON THE INTERNET. And by the way- the blogger’s information about Congress’s retirement benefits is true. And, President Obama is NOT responsible for every bad situation that results from today’s terrible economy. People have been saying that since January 21, 2009!

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  5. “I received an email which indicates the premium for Part B in 2012 will rise to $104.20, but no COLA for Social Security. But hold on to your hats. Interestingly, in 2013, (following the Nov. 2012 elections) the premiums will rise to $120.20 and in the following year of 2014 Medicare Part B premiums are to be (again according to the email) $247.00.”

    You’re looking at a currently circulating urban e-myth – on all counts (more on this in my last paragraph, below).

    As of today (10/13/2011) Reuters reports the Part B premium for 2012 looks to be $106.60. I’ve seen $108 to $113 by other reporters this week. In any case, folks new to Medicare in 2011 will see a decrease in their Part B premium (they’ve been paying $115.40). Most others will see an increase in their premiium, of course, because most of them have been paying less than $100/month for several years now.

    The COLA for Social Security will almost certainly be something above 3.0%, and based on what I hear of September gas and food prices, the Sept 2011 figure should be a scosh greater than the Aug 2011 figure. We already know what the base Third quarter (2008)figure is (215.4953), and we already have two of the three months of the current Third quarter (2011) needed to calculate the COLA.

    With Sept 2011 just the same as Aug 2011, we have a current Third quarter (2011) figure of 223.1127. The difference (7.617) divided by the base Third quarter (2008) is an increase of 3.535%, which is 3.5% rounded to the nearest tenth of a percent.

    As for that urban myth email you say you got: Every point in it has been debunked. For a good article that shows the email, and links to a point-by-point refutation of its hooey, see http://tucsoncitizen.com/medicare/2011/10/05/medicare-big-part-b-premium-increase/.

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  6. I would like to know what has happened to all the money we as working public paid into social security???? I have worked for 50 yrs. and paid money into social security, now in my life time left, I will never get back half of what I paid in. Did the government steel the money? Shouldn’t that be a crime to use our money for other bills. The government gives immigrants money when they come into America. What about the people who worked and paid in to social security all their lives? Should that money go to support immigrants who has never worked in America or pay one penny into social security? Why doesn’t America take care of their own instead of giving our money to other Countries? I don’t see any other Countries helping America out…..I guess it is OK to let our seniors die of hunger? Their old, just get rid of them, is that what our government thinks? That is sure what it looks like.

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    • Most of us, if we live to average age at death, will get back much more in benefits than we paid out in payroll taxes through our working years. Get your statement from S.S. and do the math…

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      • YES Paul but do the math again. SS is like a club like say WOW . You have 100 million people at age say 17 starting work and paying into Social Security each and every payday for 50 yrs.,and say 70-75 percent of those die off .Now that money by law goes to the ones that make it to 65 plus yrs old.This money in SS that is left DOES NOT belong to Nuts in DC like like it or not.Now think about it where is the money that the ones that died off.The DNC thinks your money is for them. .Pres Lyndon Johnson, is the one that first started robing SS he came on TV in I think it was in 1967 or 68 at 7:00 PM and say he was going to take money out of SS to pay for the WAR we were in.Because SS had so much money and no place to put it;but he would pay it back ,what a line of BS .Also did you know that you (your SS money) has been paying for 100 percent of Welfare not your dear old uncle Sam as you think and have been told.As of about a year ago they have robed you and I of over 40 Trillon Dollars.Call the nuts in DC and ask,Over the last year or so the news ABC,NBC and CBS along with both parties in DC has been saying SS is in trouble,SS is in trouble .That is not true; Washington DC is in trouble.This last July DC printed up 2 percent more money with not a think to back up that money .Because in JULY DC had to start paying back the money to Social Security ;that funny money went to SS on that they need to pay back by law.My pappy told me if you tell a LIE long enough and Loud enough people will start to think you are telling the truth .Once that money is our money not the ones on welfare for life. Welfare days are numbed my friends.

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    • I agree with the information you gave……it is not fair. If we could have just put aside the money for our SS we PAID IN.. into some account of our own…We would be much better off. But I guess government needed it to be able to DIP into someone else’s money. Who are these people in Congress anyway!!! When we personally are out of money,,,,,we can’t dip into someone else’s money
      . Oh well, they “GOTYA” anyway you look at it.

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      • Actually, if you put aside the money you paid into Social Security, when it came time to retire you would run out of money in a few years, there would be no inflation adjustment and no survivor benefits.

        Dick

        Richard D Quinn Editor Quinnscommentary.com

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  7. With the wars alone stoped. And being reinbursed for what other countrys owe us . And without the theives in the banking insd. We would have no problem helping out our own people. Every child in america eat , jobs would be booming here thus we would still be on top. Fire em all and send the goverment a clear message we arn,t going to take what them shove at us anymore. I ques they just like pissing all over there for fathers without taking
    any responsabilty to doing the right thing,

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  8. Some people spent their lives working and saving for retirement but due to unexpected illness their savings is gone and all they have is social security retirement. No one can predict an illness that will wipe out their savings, but our government will give our tax dollars away to other countries before they take a good look in their on back yard. They need to help their own country before tossing so much money into others laps.

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  9. I am retired. I would like to see our Government Senators, Congressmen and Representatives receive a 1.2% cola raise. That is a shame, a lot of people are only living on Social Security Benefits as a means of their only monthly income. For a person only receiving for example $1,000 a month social security benefits, they will receive a cola raise of $10.00 per month which will be eaten up and more of their benefits will be also consumed to pay for the Medicare Part B. Yet our government officiasl make a salary of $174,000 a year, have the best Health Care Plan in the world, and receive at least a 3% raise every year, if you do the math, our Senators, Congressmen and Represetatives that we have voted into office to work for us, get approxiamately a $5,000 a year raise. Our Government stoped the Cola raise in 2009, and have gotten their foot into the door, and they have the nerve to maybe give a COLA raise, of 1.2% percent in 2012, I would like to see them live on just a social security befefit of around $1,000 dollar a month, like alot of American’s have too. We as American’s have built this country, what it is today, Our government better start bringing back God into our country, and working for the American people first, instead of being Big Brother forthe rest of the world, take care of our own first then help the rest of the world. The American’s of this country are getting fed up with the way our elected government officials take good care of themselves and don’t care anything about the people who voted them into office. Start doing your job, and take care of our own. P.S. I also thing that it is ridculous that our Government Offiicials receive the same pension as their salary. A very discouraged conerned American.

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    • You really should look at the facts. Congress hasnt had a raise in several years, their average raise over more than ten years has been less than 3%, their health plan is the same as millions of other government and private workers and no better than Medicare. Their pensions are less than 50% of pay after thirty years or so.

      Why after a lifetime of work should anyone be living only on Social Security. It was supposed to be a safety net, not ones sole retirement income.

      I would really like to hear more about your situation.

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      • At the time this was written (check date) these were the facts. Since then, inflation picked up considerable thus moving us to about a 3.5% COLA for 2012. For some people even that or most of the increase may be offset by the Part B premium increase.

        Dick

        Richard D Quinn Editor Quinnscommentary.com

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      • Not sure what you are referring to, but the facts are what they are even if they don’t match with preconceived notions or left or right rhetoric.

        Dick

        Richard D Quinn Editor Quinnscommentary.com

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      • I am sorry that you are so misinformed. You should do a little research before making such a stupid statement. The above statement was true and the money was spent by Johnson to support the Vietnam war, as big a fiasco as Iran an Pakistan.

        A disabled Vietnam Vet.

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      • BULL! Congress has retirement and medical insurance unlike any I ever seen and would be the envy of any retiree. Please check on your facts before post such tripe.

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    • I am agreement with you as so many other Americans are…I feel they should have to hold their seat for a much longer time in order to get a pension. The military has to do 20yrs to get a pension of small portions. So does any fireman, police.

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    • I totally agree with this comment. The american people are having such a difficult time with the economy, jobs, health care, the housing market and the price of gas and etc. We are told that the increase prices of a gallon of gas are a speckulation of rising oil prices. The oil companies are prospering with millions and millions of dollars profit every quarter, and most americans are having such a hard time just getting by. Our process of determining the COLA raise is a joke. It is a crime to give someone a 1% raise on their social security benefits, some poor people will only get around $.10.00 a month and that will be eaten by the increase Medicare part B. Our elected officails should start doing their job for the betterment for our country and for the american poeple.

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      • Why should people on Social Security receive any increase in monthly benefits at the expense of the younger generation which is the generation that is having the most difficult time as you note? Who will pay for an increase while the country goes deeper into debt. We all had a lifetime to plan for retirement, what right do we have to keep taking from our children’s and grandchildren’s futures?

        I am 68, I will take a COLA when it comes but I am not “entitled” to it or deserve it. I and you will receive every penny we put into Social Security back in benefits in less than seven years of collecting SS.

        Congress did a great disservice to the Country by putting the COLA on an automatic formula as opposed to evaluating it’s affordability when justified.

        Dick

        Richard D Quinn Editor Quinnscommentary.com

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  10. Whar are the Elderly and Disable going to do if they have to pay for insurance. if they do give them a Raise in 2012 something else goes up to take it. What is this WORLD coming too. Stealing jusat to feed there Family, wanting to be put in Jail so there Family will be feed, God take a hold on this put the Goverment in this place for one week and see what they can do no insurance, no food, no AFDC, Food Stamps and especially No Jobs available.

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    • First, forget what the experts say about the income replacement you will need in retirement. It’s not seventy, eighty or ninety percent it’s 100% plus the ability to cope with inflation. This means the ability to generate extra income beyond any fixed income. Second, recognize now that anywhere between $600 and $900 of your retirement income will go toward health care related costs. That means accumulate funds to deal with those costs, perhaps an HSA or set up an IRA that you designate for those expenses or ultimately delay retirement. The idea of early retirement is not valid for most people. Finally, don’t enter retirement blind to all the issues as many people do. I did retirement planning for thirty years and still there are a few things I did not catch, like the income adjusted Medicare premiums.

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      • I just Googled ‘medicare premiums 2012’ and was informed that nothing has been posted as of this date, 10-11-11. Not minutes later I received an email which indicates the premium for Part B in 2012 will rise to $104.20, but no COLA for Social Security. But hold on to your hats. Interestingly, in 2013, (following the Nov. 2012 elections) the premiums will rise to $120.20 and in the following year of 2014 Medicare Part B premiums are to be (again according to the email) $247.00. Apparently, these increases were incorporated into the Obamacare Legislation. My question would be for my legilative representatives who voted for the legislation. If you actually read the bill, then why would you vote for it?

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