SSA Says Zero Social Security Cost of Living Adjustment in 2016

social security cost of living adjustment 2016

How No Social Security Cost of Living Adjustment May Hurt Americans

A zero cost of living adjustment (COLA) for Social Security recipients in 2016 means that many Americans will have to grapple with rising food costs without added payment to compensate.

Reasoning Behind the Decision for No Social Security Cost of Living Adjustment

On Thursday October 12, the Social Security Administration (SSA) announced that for just the third time in 40 years, beneficiaries would not see a Social Security cost of living adjustment (COLA). Each year the COLA is determined by inflation, which the government agency didn’t deem substantial enough to warrant an increase for 2016. According to the Social Security Administration, particular calculations are made using a formula outlined in the Social Security Act. This year the reduction in gas prices played a large economic factor in the determination to not increase monthly Social Security payments.

Who This Will Affect?

The decision to not implement a Social Security cost of living adjustment (COLA) affects over 70 million beneficiaries. That number includes disabled workers, Supplemental Security Income (SSI) recipients, disabled veterans, retirees, federal retirees and their survivors. This equals nearly 20% of the U.S. population and hurts those who rely strictly on Social Security payments to make ends meet.

Out of this group those who may feel the effects of the zero COLA increase most are the 30 percent of Americans who are not protected by the Medicare “hold harmless.” The “hold harmless” law prevents outpatient care premiums from being taken out of an individuals Social Security checks when a COLA is not implemented. According to The Washington Post, people who may fall under this classification are individuals new to Medicare, federal retirees who don’t receive Social Security payments, and people who make over $85,000 annually. Because they are not protected by the “hold harmless” rule, these select individuals must pay for the raise in Medicare premiums across the board. This could mean those individuals would see an outrageous 52% premium spike in 2016.

The Government Realizes No Social Security Cost of Living Adjustment for 2016 Is a Problem

Advocacy groups throughout the nation realize that the Medicare premium 30 percent of recipients face is a severe problem and are currently looking for solutions. Senate Democrats are also introducing bills such as the “Protecting Medicare Beneficiaries Act of 2015” to better protect American who may be adversely affected.

If you need coverage and have been denied, you may also qualify for legal representation with no out-of-pocket costs. Get a free Social Security benefits evaluation today to see if you are eligible.

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