Social Security benefits will go up by 3.6 percent in 2012 to adjust for the living costs. Social Security benefits have not increased since 2009. The increase is welcome news for retirees in this difficult economic climate. Many retirees, however, will see much of that boost devoured by increased Medicare premiums. Source of article: Social Security benefits to increase for the first time since 2009
It’s been some time
With The Cost of living Adjustment (COLA), retired Americans can expect an increase in their income. In 2012, there will be a $42.57 increase every month in pay. The average payment for Social Security right now is very high. It is around $1,182.40 right now. Last year and 2011, there was not an adjustment to COLA because of the low inflation.
Changes to Medicare
Social Security benefits are also connected to Medicare premiums. The boost in Social Security income will also allow for the very first increase in Medicare Part B rates since 2009. Doctor’s visits and outpatient services are all covered with Medicare Part B. A Centers on Medicare & Medicaid Services spokesperson declared that by the end of Oct, all Medicare Part B rates for 2012 will be explained.
Social Security COLA increases means the ceiling for payroll taxes also increased. There has been a fairly low ceiling. Since 2009, it has been around $106,800. It will go to $110,100 by 2012. Social Security payments will not decrease from year to year with the “hold harmless” clause. Since there was no COLA boost for 2010 and 2011, no boost was allowed in the Part B Medicare rates for existing beneficiaries. A lot of people pay the $94.60 monthly premium. That is the suit for about 75 percent of beneficiaries.
Paid by wealthier beneficiaries
The law for Social Security says that Medicare Part B Premiums have to pay 25 percent of every little thing. All covered services have to have these rates on them. To be able to provide that 25 percent, high-earning beneficiaries are going to have to pick up some of the slack since costs for health care are going up and most beneficiaries have had their rates frozen. The wealthiest of the brand new beneficiaries might be paying close to 80 percent of provider costs.