Social Security benefit checks could go down in 2010
Filed under: Retire, Retirement advice
While we won't have the official word on the annual cost-of-living increases (COLA) until mid-October, the Congressional Budget Office estimates that there will be no COLA increase for 2010 -- the first time without an increase in 35 years. For most that also means there will be no increase for Part B premiums, but some will see an increase.
For all, whether or not their Social Security benefit checks go down will depend upon how private insurers price the Medicare Part D premiums (prescription benefits). If those premiums go up, as expected, the actual check Social Security recipients receive could go down.
Even if Medicare Part D premiums remain the same, about 25% of Social Security beneficiaries will net less cash thanks to expected increases in Medicare Part B benefits. Medicare Part B benefits, which cover doctor's visits and other outpatient services, must stay the same thanks to a "hold-harmless" clause of the federal law that forbids increases in Part B premiums when there is no COLA increase.
But, the hold harmless clause does not protect three classes of people:
- People who don't have the premium withheld from their Social Security checks.
- People who pay a higher Part B premium based on higher income.
- People newly enrolled in Part B.
Most of the people who don't have Medicare Part B premiums taken out of their checks get their premiums paid under the state Medicaid programs, so they won't see an increase. Instead the states might have to pick up the higher tab.
The reason this smaller group of beneficiaries would have to pick up the tab is because by not raising the costs to a majority of Medicare beneficiaries there will likely be a shortfall in revenue for Medicare Part B that will need to be made up by the 25% who are not protected by the hold harmless clause.
We likely won't know the impact on Social Security benefits or how much people will pay for Medicare Part B or Part D until at least mid- to late-October when the Social Security Administration and the Centers for Medicare and Medicaid Services release the final numbers. Even at that time the full impact of any Medicare Part D increases won't be known for certain until open season for Part D plans begins in mid-November.
Lita Epstein has written more than 25 books including "The Complete Idiot's Guide to Social Security and Medicare" and "The Pocket Idiot's Guide to Medicare Part D."
Reader Comments (Page 1 of 1)
9-21-2009 @ 11:21AM
Rosemary said...
Representative Walter Jones introduced a bill to the Ways and Means committee of congress on September 14, 2009 restoring the 2010 COLA on an emergency basis. This bill is H.R. 3557. We need to contact our congresspeople and urge passage of this bill. AARP should be advocating for seniors on this issue, but so far have not. Seniors need to contact AARP and ask them to urge congress to pass H.R. 3557.
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9-26-2009 @ 6:07AM
kenneth mudd said...
please pass hr 3557 seniors need a bailout also
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9-27-2009 @ 10:26PM
pat said...
I am a democrat and that is how I vote. However, I am also a very disappointed senior citizen. I have not heard the Obama administration use the term "senior citizen" or "elderly population" in any positive way. Workers received an increase in their salary checks; seniors received a one-time payment of $250. Now we hear that social security will not be increased in 2010, and for some, may be reduced.
We put you in there, folks, and we can take you out. Don't you look at the numbers?
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9-28-2009 @ 4:19PM
Shelby said...
If the government hadn't taken out of the social security fund to fund other government (give away) programs we woud not have this problem. I am a 69 yr old disabled female alone and living in my doublewide with a roof which has been leaking for over a year and not able to afford the food I need so yes, I am very upset that our monthly SS ckecks may be even less. The government needs to put all our money back into the fund so all of us who worked all our lives and paid in to SS will get our checks.
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9-28-2009 @ 7:09PM
can1jane said...
Why does Social Security keep awarding divorced spouses benefits? They are eligible to collect benefits from ex-spouses if they have been married 10 years, and it doesn't affect the current spouse's benefits. That means two people are collecting benefits for one person. Surely stopping this practice could save a ton of money for SS.
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9-28-2009 @ 8:35PM
Bonnie M. said...
I am a divorced spouse who collects a small amount of my ex-husbands ss. It is a whopping $249 a month. We were married for 32 years and had three children together. His first wife collects on her own account I am sure, but I was married to him 3 times as long as she was. Even withthis small part that I receive my check is #1160 dollars and I am raising an 11 year old grandchild. I've worked since I graduated at age 17 but being the wife,my earnings were far less. I was theone who took time off for kids dr. appointments, school plays, etc. I consider what I get from hisbenefits as only fair. He couldn't have earned whathe earned if I hadn't been there to take up the slackwith kids, etc. Our government has been screwing over seniors for decades. They bailed our AIG, GM, banks, etc but can't afford thecola for retirees????Bet they vote themselves a raise, as usual in the middle of the night without the rest of us knowing until after the fact. We need a million senior marchon Washington. Call me, I'll drive!!
10-08-2009 @ 6:49AM
Jerry S said...
We gotta pay back all those stimulas checks,were the workers.there is no way out.we pay. Jerry S
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10-14-2009 @ 9:54PM
Arthur said...
I am not a senior yet, but within 10 years I will be. I think the Obama administration is bent on paying for all these extra expendures on the back of the seniors who have worked hard their entire life to get their SS checks. Now, we hear no COLA increase for 2 years and 500 million dollar cuts to Medicare. You tell me is that the change you folks voted for?
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10-14-2009 @ 9:56PM
Larry Ronld Smith said...
I like to no if a 28 year old will live to see retirement? Went it come down for me to drole my money? I hafe to live for 70 year and i don't think i will see it. and i love to live my life and have money come in to me the ecomie slow down last year and this year to will i ever see itthat quist?
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10-30-2009 @ 11:01AM
wanda harris said...
This is reprehenisble.How do you justify taking away money from seniors who for the most part live on below poverty ss payments.some disabled and their only means of income.the last stimulus check i got paid for an over priced medicine i needed that was not covered. Why is there no regulation on what Dr.s and hospitals CHARGE.iF I DID NOT HAVE MY ONE AND ONLY SISTER. I WOULD BE HOMELESS.I have seen so many abuses of what Medicare is charged for some things.especially all the so called preventative medicine programs. Example. Pulmonary rehab. my portion alone would have been 4000.00. it is nothing more than a exercise room for seniors with respirtory problems
i could join a gym for far less. Dr.s were forced into increasing their charges because of the amounts they were paid supposedly
howevr.what they dont get paid is a tax write off for them...
i am tired of months of waiting for an appointemnt or pay excessive urgent care and hospital charges.....i cant pay for a decent meal.a warmer home or an airconditioned home. and because i dont own a home i live in i get no baseline discounts for utilities....I cant even get paid for working at my church for a little extra without the threat of losing my payments.and i am 64 disabled and when i feel better i try to cook for the church... for an extra meal for myself. oh by all means reward the people who put us here and but the burden on people who cant help themselves.. lets wake up people and speak loudly about this.
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