Retired people will get a paltry boost in their Social Security checks in 2017 – the second successive year of flat or near-flat advantages, and the 5th year of inflation adjustments below 2 percent. Next year’s cost-of-living adjustment (SODA POP) will be just two-tenths of 1 percent, according to forecasts in the annual report of the trustees for Social Security and Medicare, released on Wednesday. That number might be revised up this fall, when the main SODA is released, said Paul Van de Water, senior fellow at the Center on Spending plan and Policy Priorities – possibly as high as half of 1 percent. “The trustees’ assumptions are based on inflation numbers that are a couple of months old,” he stated. “The latest numbers suggest the SODA POP might be a bit greater.” Still, for a retiree receiving the average monthly Social Security advantage – $1,341 – the raise is not most likely to top a paltry $5 each month. Don’t spend it all in one place, folks. TWEAKING THE FORMULA The SODA POP news underscores the have to revisit Social Security’s formula for keeping elders even with costs – and it will offer fresh fuel for supporters of a wider expansion of benefits as part of any ultimate program reform.
Progressives have actually been requiring a more charitable yearly SODA POP formula. The present formula is tied to the Customer Cost Index for Urban Wage Earners and Clerical Employees (CPI-W), which determines a market basket of items and services of working individuals– who tend to be younger and invest less on healthcare than senior citizens. A more charitable SODA POP would be tied to the CPI-E, a speculative measure created by the U.S. Bureau of Labor Data focused on inflation affecting senior citizens. Health care boost have actually been moderate over the previous few years, however they are beginning to rise. The trustees job that per-beneficiary costs in Medicare’s Part B (outpatient services) will increase 3.1 percent next year. Even so, if the Social Security SODA is very low, the monthly premium for Part B could remain flat at $104.90 monthly for the 3rd consecutive year. That is due to the fact that of a “hold harmless” provision in federal law that prevents premiums from rising if the boost would result in a net reduction in Social Security advantages.
The hold-harmless clause would safeguard approximately 70 percent of Medicare enrollees from a premium increase. But it also would press rising program costs onto the staying 30 percent, who could see premiums leap to $149. That group consists of new Medicare enrollees, anyone on Medicare who is postponing declare Social Security benefits, and some federal and state employees. Premiums for high-income seniors – who currently pay additional charges – likewise would increase. However, unpredictability about the last COLA indicates it is too early for these senior citizens to hit the panic button. “The number may not be that big,” stated Van de Water. The trustees also predict a 5.6 percent jump in expense of the Part D prescription drug program. That will push average Part D premiums to $40, from $34 this year, notes Juliette Cubanski, associate director of the program on Medicare policy at the Kaiser Household Foundation, who adds that typical deductibles will rise to $400 from $360 this year. “Much of the boost is due to intro of high-cost specialized medications,” she stated.
LOOMING DISPUTE IN CONGRESS Social Security’s general health did not change much in the past year. The combined trust funds for Social Security’s retirement and disability benefits still are projected to be diminished in 2034, at which point present earnings would suffice to pay about three-quarters of benefits. But the monetary progress report must set the phase for a reform argument in the next Congress. That debate is expected to concentrate on restoring long-range stability to Social Security’s trust fund – and modernization and possible expansion of benefits. Expansion has been a focal point of Senator Bernie Sanders’ governmental project; Hillary Clinton and President Barack Obama have actually also moved into the growth camp (reut.rs/ 28Q9Ke5). The ideas floating around for expansion range from targeted boosts targeted at helping low-income senior citizens and those who live to very advanced ages, to a more generous COLA and across-the-board boosts. (Editing by Matthew Lewis).