TSCL Warns: Check Your Social Security Check

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TSCL Warns: Check Your Social Security Check

Cost-of-Living Adjustments (COLAs) are taking a substantial hit from a record Medicare premium increase this year. TSCL is advising seniors to carefully review the amount deducted from Social Security checks or direct deposits for the Medicare Part B premium. After the deduction for the Medicare premium, if the Social Security benefit is lower in January 2005 than it was in 2004, it could be worth your while to check on the problem with Social Security.

For seniors who receive an average Social Security benefit, the Medicare Part B premium increase of $11.60 per month will take about half of their $25 monthly COLA. But beneficiaries with low Social Security benefits need to pay special attention. The entire COLA is wiped out by the Medicare Part B premium increase for those who received a monthly benefit of about $362.40 or less in 2004 ï¿½ after the deduction of the Medicare premium. A special law, however, protects seniors from receiving less this year if the Medicare premium increase exceeds the amount of the COLA. TSCL believes that those who are most likely to be affected include widows and some Notch Babies. Minorities and disabled beneficiaries with lower benefits may also need to be vigilant.

This law that protects COLAs from increases in the Medicare Part B premium wonï¿½t apply to premiums for the new Medicare ï¿½Part Dï¿½ prescription drug coverage that will start next year. This crucial protection for COLAs from increases in Part D premiums was omitted from the new Medicare drug legislation. That means should a senior enroll, if new Medicare prescription drug insurance premiums rise more than COLAs, seniors could wind up with a Social Security check thatï¿½s less than it was the year before. As drug costs rise over time, seniors would lose a growing percentage of their Social Security benefit.

TSCL is reviewing proposals that would ensure that no more than 25% of the annual COLA could be absorbed by rising Medicare premiums. For a senior receiving a monthly benefit of $600 this bill is estimated to protect more than $2,200 over the next 10 years.

Source: 2005 Social Security Changes, Social Security Administration, October 19, 2004.

January 2005