The Social Security Administration announced today that the cost-of-living adjustment (COLA) for 2020 will be 1.6%. The COLA is the mechanism that keeps Social Security benefits in line with inflation. As the cost of living increases, so do Social Security benefits.
For 2020, the COLA increase is likely to be enough to cover the expected increase in the Medicare standard Part B premium. The COLA will increase the average Social Security benefit by about $32 dollars a month. Based on estimates from the Medicare Trustees, the standard Part B premium is projected to go from $135.50 to approximately $144.30 per month, which would be an increase of $8.80 a month. The official premium numbers have not yet been announced.
If a beneficiary does not see enough of an increase in their Social Security benefit to cover the increase in the Medicare premium, a rule called the “hold harmless provision” kicks in. This policy prevents an individual’s Social Security benefit from going down from one year to the next as a result of Medicare premium increases. For example, in recent years, many people were held harmless because the COLA increases were not large enough to cover the full amount of the increased Part B premium. For these individuals, the Part B premium increased the same amount as the increase in their Social Security benefit.
The COLA projections released today are just estimates and are based on average benefits and premiums. Medicare Rights encourages beneficiaries to look at their Social Security statement for personalized information about their benefit and premium amounts. Social Security and Supplemental Security Income beneficiaries are normally notified by mail in early December about their new benefit amount for the coming year. Most people who receive Social Security payments will be able to view their COLA notice online through their my Social Security account. People may create or access their my Social Security account online at www.socialsecurity.gov/myaccount.