Social Security raise next year may be tiny

Social Security raise next year may be tiny

By Mark Miller, Reuters columnist

CHICAGO - Last October seniors got some really good news about their Social Security cost-of-living adjustment. This October? Not so much.

This year seniors have benefited from the robust 3.6 percent 2012 Social Security cost-of-living adjustment (COLA). Adding to the good news, they learned Medicare premiums wouldn't take much of a nick out of their inflation raise.

Next year, the Social Security COLA for 2013 is expected to be 1.4 percent - and for many seniors, much of that will be eaten up by a higher Medicare Part B premium.

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However, many seniors won't even get that much because of the interplay of the COLA and premiums for Medicare Part B, which covers outpatient services. These two go hand in hand since the premium is deducted from most seniors' benefits.

Last year the Part B premium rose by a modest $3.50 per month, which meant seniors kept most of that large 3.6 percent COLA. For example, a senior receiving the average monthly Social Security benefit ($1,177) received a net 3.3 percent increase.
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Experts expect the Part B premium to rise from 5 percent to 10 percent in 2013; the Medicare trustees said earlier this year that a 9.2 percent increase was most likely. That translates to a $9.20 monthly increase over this year's $99.90 premium. That means some seniors will see no net increase at all, while many others will get far less than 1.4 percent.