When the government announces the cost-of-living adjustment for Social Security benefits next month, the increase will be at or near 1.6%, according to The Senior Citizens League.
A 1.6% COLA would be sharply below this year’s 2.8% and the smallest hike since 2017. The estimated change would boost the average retiree benefit by $23, almost half the $39 increase last year, to $1,484. It would also eat up close to 40% of the almost $9 increase in Medicare Part B premiums that the Medicare Trustees Report preliminarily estimated in April.
The Social Security Administration and the Center for Medicare and Medicaid Services (CMS) are expected to announce the official increases in the Social Security COLA and Medicare Part B premium in less than a month.
The Social Security COLA is based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), between the third quarter of 2018 and third quarter of 2019. To date, the government has data on 11 of the 12 months used in the COLA calculation. The September data, which is the missing month, is set to be released on Oct. 12.
Mary Johnson, the Social Security policy analyst at The Senior Citizens League who conceived the latest COLA estimate, based the projection on existing CPI data plus an extrapolation for the September data which, in turn, is based on historical average monthly increases.
“If premiums rise by $8.80 or more [her estimate for the Medicare Part B increase] and if the cost-of-living adjustment (COLA) is 1.6% as we estimate, then Social Security recipients with benefits of about $550 or less are at risk of seeing the Part B premiums take the entire COLA, leaving nothing extra to deal with other rising costs,” said Johnson in a statement.