SPOTLIGHT: SOCIAL SECURITY'S EFFECT ON MEDICARE
The Obama administration and the Congressional Budget Office indicate that Social Security beneficiaries will not receive a cost-of-living increase in 2010 or 2011, which would have "major implications for Medicare." Social Security typically increases benefits annually to keep up with rising prices of consumer goods; however, the current economic recession, coupled with other factors, has resulted in low inflation, which likely will result in the lack of a cost-of-living increase. Federal law stipulates that most Social Security beneficiaries cannot have their Medicare Part B premiums increase by more than the dollar amount of the cost-of-living increase in their Social Security checks. As a result, about 75% of beneficiaries' Medicare Part B premiums will remain the same. However, about 25% of Medicare beneficiaries are not protected by this law and could see their premiums increase. Millions of beneficiaries also could experience higher premiums for drug coverage under Medicare Part D because there are no laws that prevent such an increase. (story)