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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)


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