|Low COLA bad news for federal retirees, says NARFE
With the announcement by the Bureau of Labor Statistics of consumer price index information for September, the 2017 cost-of-living adjustment (COLA) to federal civilian and military retirement annuities and Social Security benefits in 2017 will be 0.3 percent. In a press release issued by the National Active and Retired Federal Employees Association (NARFE), President Richard G. Thissen stated: “Not only is the COLA increase unrealistically low and not reflective of the expenses faced by seniors, hundreds of thousands of federal retirees enrolled in Medicare will see a significant decrease in their annuities for the second straight year, due to the so-called ‘hold harmless’ provision of Social Security law. NARFE is continuing to seek congressional action to fix this unfair disparity.”
Under the hold harmless provision of the Social Security Act, the dollar increase in Medicare Part B premiums is limited to the dollar increase in an individual’s Social Security benefit. With such a low COLA for Social Security benefits, about 70 percent of beneficiaries will be held harmless, meaning their Medicare Part B premiums will increase, on a dollar-to-dollar basis, only in proportion to the increase in their Social Security checks. The baseline premium for current beneficiaries held harmless is $104.90/month.
However, the remaining 30 percent of Part B beneficiaries who are not held harmless, including federal retirees who are covered by the Civil Service Retirement System (CSRS) and who do not receive Social Security benefits, will shoulder the bulk of the cost of the 2017 premium increase. As projected by the Medicare Trustees, these individuals will see their premiums rise significantly. Without the effect of the hold harmless provision, there would be little to no increase in the standard Medicare premium.
“It is grossly unfair that those who pay their premiums from something other than Social Security must pay more in premiums,” Thissen stated. He called on the White House and Congress to prevent this unfair and disproportionate Medicare premium increase for federal retirees and millions of others. “Both the Administration and Congress have the authority to keep the increase from going fully into effect,” Thissen said, “and I urge them to do so quickly.”
Read the complete press release here.
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