There’s news abounding for 2012 coming from the Social Security Administration (SSA) including increases to the cost-of-living adjustment (COLA), a rise in what seniors pay for Medicare Part B, and new wage limits workers must meet before the Social Security tax of 6.2 percent stops as a deduction from paychecks.
Here's how it works: By law, most Medicare enrollees can't be charged a Part B premium that produces a net reduction in Social Security benefits. Assuming the Social Security and Medicare percentages come in as forecast, this "hold harmless" feature would protect seniors with Social Security benefits of $625 or lower, according to SCL.
Seniors with higher benefits would see a small inflation raise. A senior with a $1,000 monthly benefit would see a 0.48 percent net increase after the Part B adjustment; for a $1,500 monthly benefit, the net COLA would be 0.79 percent.
The hold-harmless provision doesn't protect three groups of beneficiaries: high-income seniors, new enrollees in Medicare this year, and low-income seniors who are eligible for Medicare and Medicaid. High-income beneficiaries include individuals with annual income starting at $85,000 (single filers) or $170,000 (joint filers), and move up from there. This group pays full freight on the Part B premium, plus an income-based surcharge. And the surcharges aren't limited to Part B: Extra premiums also are charged for prescription drug plans (Part D) and Medicare Advantage plans (Part C).
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