Seniors receive raises, insurance premiums eat them up
For the first time since 2009, area senior citizens will receive an increase in their benefits, but higher Medicare premiums may eat up a big chunk of it.
Area seniors will receive a 3.6 percent raise in benefits, with Medicare Part B expected to take as much as one-fourth of the increase in raised premiums.
For those in Barry County, the raise might help offset some of the higher cost of living expenses that have whittled away at retirement accounts and savings during this economic crisis.
Starting in January, nearly 60 million Social Security recipients will receive an average increase of about $39 a month. Those receiving Supplemental Security Income will average an increase of $18 per month.
In rural areas, such as Barry County, these payments contribute significantly to the local economy. In Barry County, over 8,000 people received some sort of Social Security payment in 2009, which reflected nearly $97,000,000 in buying power.
Seniors didn't get raises in 2010 or 2009 because the inflation rate was too low, according to the inflation measure used to calculate these raises.
As a result, Medicare Part B premiums were frozen at the 2009 level for nearly 75 percent of the program's beneficiaries. The remaining 25 percent, which includes new enrollees, high-income families and low-income recipients who have had their premiums paid by Medicare, have carried the burden of the resulting premium hike.
In 2009, premiums were listed at $96.40 per month, while those enrolling in the program in 2010 paid premiums of $110.50. Those enrolling in 2011 paid an even higher premium cost of $115.40.
With the cost-of-living increase, adjustments to the Medicare premium level will see a decrease in premiums for nearly one-fourth of the programs recipients, to $106.60. The remaining three-quarters of the program's beneficiaries will see an increase of about $10.20 per month, depending on what the premium's actual rate is when it is set this January.
The rate is determined on actual costs to fund 25 percent of the Medicare program. Premiums, which cover doctor visits, will be deducted automatically from recipient's monthly Social Security benefits.