As of Monday, October 19, 2015
With consumer prices down over the past year, monthly Social Security and Supplemental Security Income benefits for nearly 65 million Americans will not automatically increase in 2016.
The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers. As determined by the Bureau of Labor Statistics, there was no increase in the index from the third quarter of 2014 to the third quarter of 2015. Therefore, under existing law, there can be no COLA in 2016.
This is only the third time in almost 40 years there has not been an increase in the cost-of-living adjustment.
The Department of Health and Human Services has not yet announced Medicare premium changes for 2016. Should there be an increase in the Medicare Part B premium, the law contains a “hold harmless” provision that protects approximately 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit.
Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2016.
In addition, beneficiaries who have their Medicare Part B premiums paid by state medical assistance programs will see no change in their Social Security benefit. The state will be required to pay any Medicare Part B premium increase.