At the beginning of 2016, Social Security recipients did not get any increase in their benefits. However, millions of Medicare beneficiaries who pay their premiums by check, usually because they do not yet collect Social Security or they participate in an alternate retirement program such as state teacher retirement, saw their premiums rise.
2017 Medicare Premiums Could Rise for Millions
Retirees who are not receiving Social Security, because they either have not filed yet or because they participate in an alternative retirement program such as a State Teacher's Retirement plan, could also see their Medicare premiums increase in 2017. It is estimated that the Medicare Part B in 2017 will be $149, up from 2016's rate of $121.80 and 2015's rate of $104.90. This will affect about 30 percent of all Medicare recipients.
Current law protects people from getting a Medicare increase that exceeds their Social Security increase unless they are new to Medicare or they pay their Medicare premium by check ... which is the case for millions of people on non-Social Security retirement plans.
This means that in future years, if Social Security premiums increase by more than a couple of dollars, a large increase in Medicare premiums could eat up all or most of the raise.
Congress Continues to Fail to Address Social Security and Medicare Shortfalls
In addition to the ridiculously low increase in Social Security benefits and rising Medicare rates, Congress has continued to fail to resolve shortfalls in these programs, despite the fact they are absolutely essential to the lives of the vast majority of retirees.
The government currently estimates that the trust fund that helps bolster Social Security benefits will run out of money by 2034; the trust fund that helps support Medicare benefits will run out in 2028. In the case of Medicare, this is two years sooner than previous estimates.
When the trust funds run out, the programs can continue to operate, but at only 75 to 85 percent of their current levels, which could mean cuts in benefits for retirees.
According to the U.S. Treasury Secretary Jack Lew, "reform will be needed and Congress should not wait until the eleventh hour to address the fiscal challenges, given that they represent the cornerstone of economic security for seniors in our country."
Final Numbers Not Yet Confirmed
It is possible that the 0.3 percent 2017 Social Security increase and/or the increase in Medicare premiums could be altered slightly when the final decisions are made in the fall of 2016. Last year, Congress did vote to decrease the initial projected increase in Medicare premium rates. However, there is no guarantee that will happen.
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