If The Senior Citizens League is correct in its forecasts — and it has a strong record of that — roughly half of the Social Security cost-of-living adjustment (COLA) for 2020 for the average retiree will be wiped out by the increase in Medicare Part B premiums that year.
Based on its analysis of the recent Medicare Trustees Report, the league expects that the Medicare Part B premium, which pays for outpatient medical services and supplies such as doctor visits and medical equipment, will increase $8.80 per month, or 6.5%. It’s forecasting a 1.2% COLA for Social Security, based on future projections of Consumer Price Index data available through March, which for the average beneficiary collecting $1,461 a month amounts to roughly $17.50.
For recipients collecting $735 or less in benefits, the Medicare Part B premium increase would wipe out their entire COLA.
“Roughly four million Social Security retirees with low benefits could be at risk of seeing no growth in their net Social Security benefits in 2020, after the deduction for rising Part B premiums using these projections,” writes Mary Johnson, a Social Security and Medicare policy analyst for The Senior Citizens League.
They would have no additional funds to pay for rising costs for health care, housing or other necessities, which is an issue for a growing number of retirees.
The latest Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey of roughly 2,000 adults 18 and older found that paying for health care expenses in retirement is the top expense concern among Americans regardless of age and the No. 1 retirement-related concern for adults over 65 years old.