Social Security 2024 COLA vs. Medicare — Do Gains Offset Cost Increases?
GOBANKINGRATES.COM | VANCE CARIAGA October 18, 2023 at 4:49 AM
Anyone who pays close attention to Social Security retirement benefits knows that the annual Social Security cost-of-living adjustment (COLA) tells only part of the story about how benefits are impacted by inflation. The other part has to do with changes in Medicare costs, which often eat into COLA increases and give seniors less spending power.
Every year, the Centers for Medicare & Medicaid Services (CMS) adjusts Medicare Part B premiums, deductibles and coinsurance rates according to provisions in the Social Security Act, the agency said on its website. Sometimes those premiums go down and sometimes they go up — and in 2024, they are going up.
Last week, the CMS announced that the standard monthly premium for Medicare Part B enrollees will be $174.70 in 2024, an increase of $9.80, or 6%, from 2023. The annual deductible for all Medicare Part B beneficiaries will rise to $240 in 2024 from $226 in 2023.
The increase in standard Part B premiums for 2024 follows a $5.20-per-month decline in 2023, USA Today reported. The main reason for this year’s decline was lower-than-expended spending on the Aduhelm Alzheimer’s drug and other healthcare costs. But projected increases in healthcare spending will push the 2024 Part B premium higher.
The Medicare changes were announced on the same day that the Social Security Administration said the 2024 Social Security COLA will be 3.2%. The 2024 COLA represents a steep drop from this year’s 8.7% increase which was the highest in more than four decades, but is still well above the 2.6% average over the past 20 years.
A COLA of 3.2% would add an extra $57.35 a month to the average Social Security retirement benefit, which was $1,792.37 a month as of August 2023. That’s a significant drop from the average monthly increase of about $146 based on the 2023 COLA.
Many Social Security recipients won’t even get the full COLA next year because of the higher Medicare Part B premium, which is automatically deducted from Social Security payments each month. The Medicare changes won’t completely wipe out the higher COLA, but they’ll reduce it enough to create financial challenges for a lot of beneficiaries, experts say.
Anyone who pays close attention to Social Security retirement benefits knows that the annual Social Security cost-of-living adjustment (COLA) tells only part of the story about how benefits are impacted by inflation. The other part has to do with changes in Medicare costs, which often eat into COLA increases and give seniors less spending power.
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Every year, the Centers for Medicare & Medicaid Services (CMS) adjusts Medicare Part B premiums, deductibles and coinsurance rates according to provisions in the Social Security Act, the agency said on its website. Sometimes those premiums go down and sometimes they go up — and in 2024, they are going up.
Last week, the CMS announced that the standard monthly premium for Medicare Part B enrollees will be $174.70 in 2024, an increase of $9.80, or 6%, from 2023. The annual deductible for all Medicare Part B beneficiaries will rise to $240 in 2024 from $226 in 2023.
The increase in standard Part B premiums for 2024 follows a $5.20-per-month decline in 2023, USA Today reported. The main reason for this year’s decline was lower-than-expended spending on the Aduhelm Alzheimer’s drug and other healthcare costs. But projected increases in healthcare spending will push the 2024 Part B premium higher.
The Medicare changes were announced on the same day that the Social Security Administration said the 2024 Social Security COLA will be 3.2%. The 2024 COLA represents a steep drop from this year’s 8.7% increase which was the highest in more than four decades, but is still well above the 2.6% average over the past 20 years.
A COLA of 3.2% would add an extra $57.35 a month to the average Social Security retirement benefit, which was $1,792.37 a month as of August 2023. That’s a significant drop from the average monthly increase of about $146 based on the 2023 COLA.
Many Social Security recipients won’t even get the full COLA next year because of the higher Medicare Part B premium, which is automatically deducted from Social Security payments each month. The Medicare changes won’t completely wipe out the higher COLA, but they’ll reduce it enough to create financial challenges for a lot of beneficiaries, experts say.