Most years, no. This is because most older people have Medicare, and Part B (which covers outpatient care) premiums are usually deducted from Social Security benefits. But not this time.
The COLA released Thursday is aggregate and applies to everyone who receives Social Security. However, changes in Part B premiums will affect the net increase.
In many cases, higher Part B premiums will reduce a retiree’s COLA. Also, in years when the COLA is very small, or when Part B growth is high, the premiums can be substantial.
But in 2023, the opposite will happen. Seniors can expect increased COLA due to the Part B premium. The standard monthly Part B premium will drop $5.20 to $164.90. (The annual Part B deductible is also reduced by $7 to $226.) Lower premiums are rare.of Last fell in 2012The decline is the result of an unusual situation surrounding Aduhelm, a controversial and very expensive Alzheimer’s drug. The Food and Drug Administration approved Aduhelm in June 2021, despite objections from the agency’s scientific advisory board.
The drug initially cost $56,000 per patient per year, but Biogen, the drug’s maker, later cut the price to $28,800.
Because Aduhelm is administered on an outpatient basis, the costs are covered by Part B, not Part D, of the prescription drug plan. Medicare officials projected Aduhelm’s costs when they raised standard Medicare Part B premiums in 2022 by 14.5% to $170.10 a month. intermediate rebate.
said Tricia Newman, executive director of the Kaiser Family Foundation’s Medicare Policy Program.
What happens in years when Part B premium increases are greater than COLA?
This can be a problem during periods of low inflation. Over the past decade, there have been two years with zero COLA and five years with an adjustment of less than 2%.
Under federal law, the amount of your Part B premium increase cannot exceed the amount of your COLA. This is a “harmless hold” feature that ensures that net Social Security benefits are not reduced. Mathematics affects people differently, depending on the amount of Social Security benefits. We found that in years when COLA was low or Part B was increasing, people with low benefit payments remained flat.