The announcement that approximately 55 million Social Security recipients will get a 3.6% raise in benefits next year, the first raise in benefits since 2009, was welcome news for most. However, it is now coming to light that higher Medicare premiums could erase as much as one quarter of that increase. By law, the Medicare Part B premiums have been frozen at 2009 levels for about 75% of the Medicare recipients due to the frozen Social Security benefit payments. Considering Medicare Part B premiums must be set each year to cover 25% of the program costs, the entire premium hike has been paid by the remaining new enrollees in the program. Now that Social Security will increase due to the cost of living adjustment, the Medicare Part B premiums may very well increase for that same reason.
Read more to learn more about how the cost of living adjustment affects Social Security and Medicare.