For most of the 45 million Americans who receive both Social Security and Medicare benefits, 2012 will be yet another year with effectively no increase in their Social Security payments. Although the government is anticipating a small cost-of-living increase next year, because of increases in Medicare Part B premiums, which are deducted from Social Security payments for those receiving both benefits, an estimated three-fourths of beneficiaries will see their COLAs eaten up by higher premiums.
[See also: 2012 COLA Wash Leaves Seniors Gassed]
On the bright side, thanks to a provision that prevents higher Part B premiums from reducing Social Security payments, most beneficiaries will not have to endure a pay cut. Still, at a time when many seniors have seen their nest eggs vanish in the stock market, their homes plummet in value and their prospects for employment dry up, the effective absence of a COLA is one more bit of bad news.