Every year sees a cost of living adjustment (COLA) for the millions of beneficiaries who are a part of the Social Security system. This is thanks to a law passed in 1975 that automatically increases Social Security benefits based on the cost of medical care and the amount of inflation over the course of a year. Since it was voted into law, the COLA has been zero only two times—2010 and 2011—but that will change in 2016.
How Are Gas Prices Affecting Your SSDI?
For the third time since automatic increases were instituted, Social Security will have no cost of living adjustment. Researchers say that low gas prices have actually kept inflation low in 2015, which has made an adjustment unnecessary, but these low inflation rates are affecting Social Security beneficiaries in more ways than one.
What Are The Other Ways Low Inflation Affects Your Social Security Benefits?
Many people have their Medicare premiums deducted from their Social Security benefits automatically, so when these premiums go up, their benefits check goes down. The COLA was partially meant to cover this increase, but with no adjustment this year, some will have to pay more for their Medicare.
How Much Will Medicare Deductibles Increase?
Original estimates projected that Medicare Part B deductibles would increase to $223, but law makers had other ideas. Medicare deductibles have only risen from $104.90 to $121.80 per month thanks to the budget signed by President Obama in November. Even with this smaller rate increase, many Medicare beneficiaries with low incomes will be protected under the federal “hold harmless” law that keeps Medicare rates from rising if there is no cost of living adjustment to social security.
Luckily, the system has worked to keep you from paying for low gas prices through your Social Security, but there are even more economic factors that could put your benefits at risk. Keep following our blog to find out more about these risks, and how to protect your disability benefits.
