CQ Politics | Millions of Medicare Beneficiaries Face Reduced Social Security Benefits

By CQ Staff

New Social Security recipients and upper-income seniors could face a steep increase in their monthly Medicare premiums for the next two years, according to an analysis released Tuesday by a nonprofit health research group.

Millions more will see their finances squeezed if their premiums for Medicare Part D prescription drug coverage go up during that period.

Congress could intervene to soften the blow, but doing so would be costly at a time of ballooning deficits.

The study, by the Kaiser Family Foundation, points out that Social Security and Medicare trustees project no cost-of-living adjustment (COLA) to Social Security benefits in 2010 and 2011, and only a tiny one in 2012. The COLA is pegged to an inflation index, and the economic recession has erased increases in the relevant index.

This year, seniors received a 5.8 percent COLA, the largest in more than a quarter-century, but those days are gone for the near future.

Over the next two years, however, monthly premiums for Medicare Part B coverage will increase sharply under existing law, which requires premiums to cover 25 percent of program costs. Part B pays for doctor bills and other outpatient costs, and the monthly premiums that seniors pay are deducted from their Social Security benefits. The 2009 premium for most beneficiaries is $96.40 per month.

Medicare trustees project Part B premium increases to $104.20 per month in 2010 and $120.20 per month in 2011.....

CQ Politics | Millions of Medicare Beneficiaries Face Reduced Social Security Benefits