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<DIV><FONT size=2 face=Arial>Hi, all.</FONT></DIV>
<DIV><FONT size=2 face=Arial>For your information.</FONT></DIV>
<DIV><FONT size=2 face=Arial>Jim Sofka.</FONT></DIV>
<DIV>
<P style="MARGIN: 0in 0in 10pt" class=MsoNormal><FONT face=Calibri>Updated At 3
52 PM.. Medicare rise could mean no Social Security
COLA By STEPHEN OHLEMACHER Associated
Press The Associated Press
WASHINGTON . Millions of retired and disabled people in the United
States had better brace for another year with no increase in Social Security
payments. <BR><BR>The government is projecting a slight cost-of-living
adjustment for Social Security benefits next year, the first increase since
2009. But for most beneficiaries, rising Medicare premiums threaten to wipe out
any increase in payments, leaving them without a raise for a third straight
year. <BR><BR>About 45 million people one in seven in the
country receive both Medicare and Social Security. By law,
beneficiaries have their Medicare Part B premiums, which cover doctor visits,
deducted from their Social Security payments each month. <BR><BR>When Medicare
premiums rise more than Social Security payments, millions of people living on
fixed incomes don't get raises. On the other hand, most don't get pay cuts,
either, because a hold-harmless provision prevents higher Part B premiums from
reducing Social Security payments for most people. <BR><BR>David Certner of AARP
estimates that as many as three-fourths of beneficiaries will have their entire
Social Security increase swallowed by rising Medicare premiums next year.
<BR><BR>It's a tough development for retirees who lost much of their savings
when the stock market collapsed, who lost value in their homes when the housing
market crashed and who can't find work because the job market is weak or they
are in poor health. <BR><BR>You just don't have the words to say how much this
impacts a person," said Joyce Trebilcock, a retired legal secretary from Belle,
Mo., a small town about 100 miles west of St. Louis. <BR><BR>Like most U.S.
retirees, Trebilcock, 65, said Social Security is her primary source of income.
She said a back injury about 15 years ago left her unable to work, so she
applied for disability benefits. Now, she lives on a $1,262 Social Security
payment each month, with more than $500 going to pay the mortgage. <BR><BR>I've
cut back on about everything I can, and I take the rest out of my savings,"
Trebilcock said. Thank God I've got that. That's going to run out before long,
at the rate I'm going. ... I have no idea what I'm going to do then.
<BR><BR>Medicare premiums are absorbing a growing share of Social Security
benefits, leaving retired and disabled people with less money for other
expenses, according to a report by the Congressional Research Service.
<BR><BR>Social Security recipients spend, on average, 9 percent of their
benefits on Medicare Part B premiums, plus 3 percent on premiums for the
Medicare prescription drug program. By 2078, people just retiring would spend
nearly one-third of their benefits on premiums for both Medicare programs, the
report said. Also, when premiums for the prescription drug program increase, as
they do almost every year, they can result in a pay cut for Social Security
recipients. <BR><BR>We could very well be entering a period where we're all
stuck with flat benefits because of the growth in health care costs," said Mary
Johnson, a policy analyst at The Senior Citizens League. <BR><BR>By law, Social
Security cost-of-living adjustments, or COLAs, are determined each year by a
government measure of inflation. When consumer prices go up, payments go up.
When consumer prices fall, payments stay flat until prices rebound.
<BR><BR>There had been a COLA every year from 1975 through 2009, when a spike in
energy prices resulted in a 5.8 percent increase, the largest in 27 years. Since
then, the recession has depressed consumer prices, resulting in no COLA in 2010
or 2011. <BR><BR>Older people might feel they are falling behind because they
haven't had a raise since 2009, but many are benefiting, said Andrew Biggs, a
former deputy commissioner of the Social Security Administration who is now a
resident scholar at the American Enterprise Institute. <BR><BR>Consumer prices
dropped, but Social Security benefits didn't drop, Biggs said. At the same time,
health care costs went up, but Part B premiums stayed the same for most
beneficiaries. <BR><BR>They are better off because of that," Biggs said.
Somebody else is paying for a greater share of their health care. This will get
me hate mail, obviously. But it is what it is. <BR><BR>Next year, the trustees
who oversee the Social Security project a 1.2 percent COLA. President Barack
Obama, in his spending proposal for the budget year that begins Oct. 1, projects
a COLA of 0.9 percent. The average monthly payment is $1,077, so either way, the
typical increase is projected to be between $10 and $13. <BR><BR>The current
spike in energy prices could boost next year's COLA, if it lasts through
September, when the increase for 2012 will be calculated. The COLA will be
announced in mid-October. <BR><BR>Medicare Part B premiums must be set each year
to cover 25 percent of program costs. By law, they have been frozen at 2009
levels for about 75 percent of beneficiaries because there has been no increase
in Social Security. That means the entire premium hike has been borne by the
remaining 25 percent, which includes new enrollees, high-income families and
low-income beneficiaries who have their premiums paid by Medicaid, the
federal-state health care program for the poor. <BR><BR>The 2009 premium levels,
which are still paid by about three-fourths of beneficiaries, are $96.40 a
month. Most of those who enrolled in the program in 2010 pay $110.50 a month and
most of those who enrolled in 2011 pay $115.40. <BR><BR>The Medicare trustees
project a Part B premium of $113.80 a month for next year. Obama's budget
projects a monthly premium of $108.20, said Donald McLeod, a spokesman for the
Centers for Medicare and Medicaid Services. McLeod cautioned that the
projections could change significantly by September, when 2012 premiums are
calculated. <BR><BR>Under either projection, a small share of beneficiaries
would get lower premiums. The vast majority would get higher premiums that could
swallow their Social Security COLA. <BR><BR>That little raise helps us," said
Estelle Jones, 66, of St. Paul, Minn. Food, heating bills, water bill, all that
stuff has gone up. ... All my medicines are very expensive, and every month I
have to figure out how I am going to pay for them. <BR><BR>Online:
<BR><BR>Congressional Research Service report: </FONT><A
href="http://tinyurl.com/yhpygw8"><FONT
face=Calibri>http://tinyurl.com/yhpygw8</FONT></A><FONT face=Calibri>
<BR><BR>Centers for Medicare and Medicaid Services: </FONT><A
href="http://www.cms.gov/"><FONT face=Calibri>http://www.cms.gov</FONT></A><FONT
face=Calibri> <BR><BR>Social Security Administration: </FONT><A
href="http://www.ssa.gov/"><FONT face=Calibri>http://www.ssa.gov</FONT></A><FONT
face=Calibri> <BR><BR>Social Security trustees' reports: </FONT><A
href="http://tinyurl.com/28tf79w"><FONT
face=Calibri>http://tinyurl.com/28tf79w</FONT></A><FONT face=Calibri> </FONT><BR
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