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Social Security Drop in Check Amount

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    I just received a notice from Social Security concerning my benefit for 2016. We didn't receive a raise because the Consumer Price Index didn't go up BUT my check amount will be almost $51 a MONTH LESS! Why? Because they raised the Medicare Part B Medical and Part D Prescription Drug premiums! My question is, if the CPI didn't go up so we get no raise, why did the premiums go up?
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Goldgirl13 Wrote: I just received a notice from Social Security concerning my benefit for 2016. We didn't receive a raise because the Consumer Price Index didn't go up BUT my check amount will be almost $51 a MONTH LESS! Why? Because they raised the Medicare Part B Medical and Part D Prescription Drug premiums! My question is, if the CPI didn't go up so we get no raise, why did the premiums go up?

    I'm sorry to hear about your situation. I'll try to explain as best I can why your Medicare premiums went up even though the CPI did not.

    The Consumer Price Index has been flat mainly because of the low cost of oil. Medicare Part B and D premiums are determined by the Centers for Medicare and Medicaid and those rates were locked in before the Social Security Administration said there will be no cost of living adjustment for 2016.

    Do you know if you are eligible for the "hold harmless rule"? Roughly 70% of all individuals receiving SSI qualify for this and will not see a reduction in their monthly benefits.

    The 30% who don't qualify for the hold harmless rule are individuals or couples new to Medicare, federal retirees who don’t receive Social Security payments, and seniors who still earn more than $85,000 per year.

  • Independent
    Campbellsport, WI
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    Fact: CPI does not include the cost of oil. A microscopic influence is awarded to include the price of gas.

    Originally, the CPI was determined by comparing the price of a fixed basket of goods and services in two different periods. Determined as such, the CPI was a cost of goods index (COGI). However, over time, the U.S. Congress embraced the view that the CPI should reflect changes in the cost to maintain a constant standard of living. Consequently, the CPI has been moving toward becoming a cost of living index (COLI).

    Over the years, the methodology used to calculate the CPI has also undergone numerous revisions. According to the BLS, the changes removed "biases" that caused the CPI to overstate the inflation rate. The new methodology takes into account changes in the quality of goods and substitution. Substitution, the change in purchases by consumers in response to price changes, changes the relative weighting of the goods in the basket. The overall result tends to be a lower CPI. However, critics view the methodological changes and the switch from a COGI to a COLI focus as a purposeful manipulation that allows the U.S. government to report a lower CPI. ( credit Investopedia )

    In a nut shell, You're getting shafted and you're going to have to like it.

    Former liberal,

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    https://www.democratichub.com/posts/12003/the-2015-cola-cpi-w-under-fire-again.aspx

    Ooops I posted the link in the wrong thread.

    We've discussed CPI-W versus Chained CPI in this website before, the latest in the above link.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Note that both plans are actually fully funded by Congress in Perpetuity. In other words, if they don't recover the Medicare Part B and Part D costs, there is no fiscal meltdown, because any shortfall is automatically funded by the U.S. Treasury, unlike the other Trust Funds.

    Please read Professor Stephanie Kelton, Econ Chair at University of Missouri at Kansas City, and the Democrats' Chief Economist on the Senate Budget Committee (Sanders appointment):

    neweconomicperspectives.org/2011/04/4-t...

    "Part B of Supplemental Medical Insurance (SMI), which pays for doctors’ bills and other outpatient expenses, and Part D, which pays for access to prescription drug coverage, are both projected to remain adequately financed into the indefinite future because current law automatically provides financing each year to meet the next year’s expected costs."

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Hi Schmidt!
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Seniors need advocates who understand how the currency works!

  • Independent
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    Dialogue Wrote:

    Fact: CPI does not include the cost of oil. A microscopic influence is awarded to include the price of gas.

    Originally, the CPI was determined by comparing the price of a fixed basket of goods and services in two different periods. Determined as such, the CPI was a cost of goods index (COGI). However, over time, the U.S. Congress embraced the view that the CPI should reflect changes in the cost to maintain a constant standard of living. Consequently, the CPI has been moving toward becoming a cost of living index (COLI).

    Over the years, the methodology used to calculate the CPI has also undergone numerous revisions. According to the BLS, the changes removed "biases" that caused the CPI to overstate the inflation rate. The new methodology takes into account changes in the quality of goods and substitution. Substitution, the change in purchases by consumers in response to price changes, changes the relative weighting of the goods in the basket. The overall result tends to be a lower CPI. However, critics view the methodological changes and the switch from a COGI to a COLI focus as a purposeful manipulation that allows the U.S. government to report a lower CPI. ( credit Investopedia )

    In a nut shell, You're getting shafted and you're going to have to like it.

    Former liberal,

    Fact: it actually does include the cost of oil if oil prices are high because oil prices impact virtually everything else. And prices don't arbitrarily drop for other things if oil is low. It simply doesn't include the cost of oil as a line item.
  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    Carlitos --- Welcome back. We missed you. I couldn't get the link to show anything but a blank page, so I found the paper in a quick search:

    Stephanie Kelton, April 6, 2011, New Economic Perspectives: 4 Trust Funds, 3 Problems: Why is the Other one so “Healthy”?

    Whenever elections are pending, candidates will use the Social Security and Medicare Trust Funds as political fodder to misinform potential voters. That and the debt and deficits. And of course lots of fear mongering about "the other". We hope you'll share your perspectives again as the Clown Car has embarked into another silly season of stupid sound bites designed to enrage the haters, bigots and the Low information voter.

  • Independent
    Campbellsport, WI
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    Carlitos Wrote:

    Seniors need advocates who understand how the currency works!

    Great Carlitos! Please explain to the "low information crowd" how's she going to get her $51.00 back?

  • Liberal Democrat
    Democrat
    Colorado Springs, CO
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    I think Jared explained it quite well, but let me expand.

    Are Medicare Part B Premiums Going Up in 2016?

    The “hold harmless” provision referenced by Jared only applies to approximately 70% of people on Medicare. Several groups don’t get the benefit of that provision, and thus, subject to the higher Medicare Part B premiums. Those groups are:

    • New Medicare beneficiaries (i.e. turning 65 or going on Medicare Part B for the first time in 2016).
    • Individuals or households who have incomes that are higher than $85,000 per year (or $170,000 for couples).
    • People who have chosen to pay Medicare Part B premiums directly rather than have them deducted from a Social Security check (either by choice or because they are not receiving Social Security).

    Also with regards to Part D, Affluent seniors that have a Medicare Part D prescription drug plan will pay an additional $12.70 to $72.90 per month, depending on their income, on top of their regular Part D premiums. By affluent seniors, they mean individuals or households who have incomes that are higher than $85,000 per year (or $170,000 for couples).

    Read the first link above for further information on how one might reduce Medicare premiums.

  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    Dialogue --Not without better representation in Congress!
  • Strongly Liberal Democrat
    Democrat
    Dallas, TX
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    When you start means-testing everything.......you get into microregulation and more bureaucracy and lawyers having to sort everything out. The resources consumed to enforce and make the rules end up eating away any cost savings and all you've changed is the distribution. My belief is that we, as Democrats, should be talking about expanding and adding to Social Security and Medicare benefits and cutting payroll taxes. But even Bernie Sanders won't go there.

  • Strongly Liberal Democrat
    Democrat
    Portland, OR
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    Dialogue Wrote:

    Fact: CPI does not include the cost of oil. A microscopic influence is awarded to include the price of gas.

    Fact: yes it does.

    The cost of oil determines pretty much everything because oil is what runs our modern society. When oil spikes the cost of all consumer goods spike because oil is used to ship those goods throughout the country. When the cost of consumer goods spikes then the CPI spikes, but when the cost of consumer goods flat lines then then the CPI flat lines.

    If you look at the recent history of the CPI and subsequent SSI COLA then you will realize that I am proven right. The price of gasoline peaked before the Great Recession in late 2008, so the SSI COLA for 2009 was increased by 5.8%, but as the price of gasoline plummeted the SSI COLA flat lined to 0% for the next two years.

    Then, as you may remember, gasoline prices spiked again in 2011, leading to an increase in the CPI. That then brought about an increase to the SSI COLA for 2012-2015. Now that gasoline prices have plummeted, it should be of no surprise that the CPI has flat lined. And since the CPI has flat lined, it should be of no surprise that the SSI COLA has flat lined as well.

    Now, if you want to get in a discussion about whether the CPI is the best way to determine the SSI COLA then I'm all for it, but to suggest the CPI does not include the cost of oil is naive at best and outright lying at worst.

  • Democrat
    Missouri
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    I've been receiving a paltry sum of SS for a couple of years and only initiated it to pay for Medicare. I don't tract SS as I know others do and need as much SS they can get. Politician's have been arguing CPI-W vs CPI for years and there are other indexes being discussed. I liked Schmidt's review that there's not much difference between CPI-W and CPI. Congress just doesn't understand people who need SS to live on are the ones who need it the most. These people need a fair index of provide a figure for SS, which it is not today. Example, is medicines, which most seniors find it very expensive even with Medicare. I assume someday a victorious politician will pursue more fairness for seniors. That politician I believe is Hillary, who has spoke on the subject before.