Cost of Living Adjustment (CoLA) is a key part of the social security paycheck. This year, retirees will be given 2.8 per cent CoLA as there will be rise in benefits for the Social Security retirees. However, there is a twist -- Medicare premiums is set to impact on CoLA.
There has been a rise in CoLA amount compared to the last year. This is part of CoLA which is there to adjust the inflation cost. However, this year retired individuals won't be able to save the extra amount as that part will go into the account Medicare premiums which have witnessed a hike.
About half of enrollees eligible for subsidies are ages 50 to 64 -- too young for Medicare. A 64-year-old with income just above the subsidy cutoff ($62,700) would pay $16,500 a year for a benchmark silver plan on average, up from $5,328, according to KFF.
"It's the pre-Medicare population that will get slammed hardest with higher premiums if the enhanced subsidies don't get extended," said Tricia Neuman, senior vice president of KFF. The subsidies expired Wednesday; a vote is expected in the House of Representatives this month on a proposed three-year extension of the tax credits, but the fate of efforts to renew them is uncertain.
Medicare costs are also rising sharply. The standard Part B premium is $202.90 per month this year -- up nearly 10 per cent and 66 per cent higher than a decade ago. Medicare trustees project an additional 7.75 per cent increase in 2027, to $218.60, and nearly $350 by 2034.
The increases hit lower-income beneficiaries hardest. One in four Medicare beneficiaries had incomes below $24,600 in 2024, and half lived on less than $43,200, according to KFF.
$10,650 a month was the average cost of a private nursing home room in 2024, according to CareScout, a company that publishes an annual study on the cost of long-term care.
Per month, assisted-living care averaged $5,900 and a full-time home health aide was $6,500 -- still well beyond what most families have planned for.
FAQs
Q1. What is CoLA?
A1. CoLA is Cost of Living Adjustment.
Q2. How much Medicare premiums have gone up?
A2. A 64-year-old with income just above the subsidy cutoff ($62,700) would pay $16,500 a year for a benchmark silver plan on average, up from $5,328, according to KFF.
There has been a rise in CoLA amount compared to the last year. This is part of CoLA which is there to adjust the inflation cost. However, this year retired individuals won't be able to save the extra amount as that part will go into the account Medicare premiums which have witnessed a hike.
About half of enrollees eligible for subsidies are ages 50 to 64 -- too young for Medicare. A 64-year-old with income just above the subsidy cutoff ($62,700) would pay $16,500 a year for a benchmark silver plan on average, up from $5,328, according to KFF.
"It's the pre-Medicare population that will get slammed hardest with higher premiums if the enhanced subsidies don't get extended," said Tricia Neuman, senior vice president of KFF. The subsidies expired Wednesday; a vote is expected in the House of Representatives this month on a proposed three-year extension of the tax credits, but the fate of efforts to renew them is uncertain.
Medicare costs are also rising sharply. The standard Part B premium is $202.90 per month this year -- up nearly 10 per cent and 66 per cent higher than a decade ago. Medicare trustees project an additional 7.75 per cent increase in 2027, to $218.60, and nearly $350 by 2034.
The increases hit lower-income beneficiaries hardest. One in four Medicare beneficiaries had incomes below $24,600 in 2024, and half lived on less than $43,200, according to KFF.
$10,650 a month was the average cost of a private nursing home room in 2024, according to CareScout, a company that publishes an annual study on the cost of long-term care.
Per month, assisted-living care averaged $5,900 and a full-time home health aide was $6,500 -- still well beyond what most families have planned for.
FAQs
Q1. What is CoLA?
A1. CoLA is Cost of Living Adjustment.
Q2. How much Medicare premiums have gone up?
A2. A 64-year-old with income just above the subsidy cutoff ($62,700) would pay $16,500 a year for a benchmark silver plan on average, up from $5,328, according to KFF.
