washingtonscene
LEGISLATIVE NEWS THAT AFFECTS YOU
COLA Letdown T
he Bureau of Labor Statistics announced Oct. 18 the Sep- tember Consumer Price Index (CPI) — the final piece of information necessary for determining the COLA for military retired pay, Social Security ben- efits, Survivor Benefit Plan annuities, VA disability compensation payments, and other federal payment programs. It will yield a minuscule 0.3-percent COLA for 2017, effective Dec. 1. People who retired from uniformed service between Jan. 1 and Sept. 30 this year also will see a 0.3-percent COLA. Those who retired after Sept. 30 won’t see their first COLA until next year. Various senior groups and legislators bemoaned the tiny COLA, especially after a year when there was no COLA at all. Some have proposed alternatives of various kinds. See the next article, “High or Low COLA: CPI Is Your Friend,” for MOAA’s perspective on those issues. A key downside to a Social Security COLA that small is it isn’t enough to cover the average senior’s Medicare Part B premium increase. By law, a person’s Social Security check
can’t be reduced because of a Part B pre- mium hike. That protection kicked in last year when there was no COLA, and it will again this year for the 0.3-percent COLA. But this protection only applies to about 70 percent of those eligible for Medicare. It doesn’t apply to the other 30 percent of people who:
Next year’s very modest COLA disappoints most and raises the potential for steep Medicare Part B premium hikes for millions — including many MOAA members.
will first start paying Medicare Part B premiums in 2017; reported 2015 incomes above $85,000 (individual) or $170,000 (married); pay Part B premiums but aren’t drawing Social Security; or are eligible for both Medicare and Med- icaid (states pay their premiums). By law, premiums for these groups
must be raised enough to cover (a) their normally expected premium increase plus (b) whatever amount of premiums the 70 percent are grandfathered for. In other words, the four groups listed above are required to pay their own Part B premium hike and part of their neighbor’s, too. When this happened with the zero- COLA situation last year, Congress stepped in with legislation to protect the four groups from having to pay extra pre- miums for the grandfathered 70 percent. But there’s no guarantee Congress will do the same this year. When there was no COLA for 2011, no Part B premium re- lief was provided, so there’s a precedent for both ways.
The penalty for the 30 percent won’t be as bad this year because the 70 per- cent will have a small COLA to pay at least part of their own premium increase. The lame-duck Congress that will re-
convene after the election is already on the hook to pass federal funding for the rest of FY 2017, to pass a final defense au- thorization bill, and more, all on a com- pressed time schedule.
DECEMBER 2016 MILITARY OFFICER 33
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