No Social Security COLA Causes Medicare Flap

The brief’s key findings are:

• In 2016, for only the third time in 40 years, Social Security beneficiaries are not expected to receive a cost-of-living adjustment (COLA).
• No COLA means that Medicare Part B premiums cannot increase for most beneficiaries, so a minority has to bear the full burden of rising costs.
• Beyond this immediate flap, a broader issue is that Medicare premium growth is not fully captured by the inflation measure used to set the COLA.
• As a result, when Medicare premiums rise rapidly, older Americans cannot maintain their non-Medicare spending.
• In short, even the Social Security COLA does not fully insulate older households from the erosive impact of inflation.