Double Whammy for Millions of Retirees

Millions of federal retirees and other seniors who do not receive Social Security benefits are facing a huge increase in their Medicare Part B premiums in January unless Congress intervenes. 

The premium hike was triggered by the Oct. 18 announcement that Social Security recipients and federal retirees will get a 0.3 percent Cost-of-Living Adjustment, or COLA, to their monthly benefits in January. 

By law, increases in premiums for most Medicare recipients cannot exceed their Social Security COLA. That's known as the “hold harmless” provision. 

However, nearly 30 percent of Medicare recipients don’t receive Social Security benefits – including 1.6 million federal employees who retired under the older Civil Service Retirement System – and therefore aren’t automatically covered by the “hold harmless” provision. 

Medicare Part B premiums are expected to rise 23 percent next year, from $121 a month to $149 a month.  

Congress last year extended the hold harmless provision to cover all Medicare Part B beneficiaries when there is no cost-of-living adjustment. However, this provision does not apply when there is a small COLA, as there will be in 2017. 

“Congress must act now to prevent a massive increase in Medicare Part B premiums for this group of retirees,” AFGE National President J. David Cox Sr. said. “Although most seniors would be protected, this group will have to pay more solely because of the uniqueness of their pension system.” 

AFGE was one of more than 70 organizations that signed a letter in September to Congressional leaders, asking for legislative relief for these affected seniors. 

Even without the increase in Medicare Part B premiums, retirees will have to tighten their belts to account for next year’s miniscule cost-of-living adjustment. Retirees already are facing a 6.2% increase in their health insurance premiums next year. 

“Prices for many items that seniors must purchase are rising faster than the overall inflation rate,” Cox said. “Forcing this group of retirees to shoulder such a huge cost burden will have a devastating impact on their already modest living standards.”

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