Awakening: Occupy Everywhere
Uncertainty in Old Age

Social Security COLA and Medicare 2012

category_bug_journal2.gif Summer is gone, the first of fall/winter holidays will be here in 10 days or so (Boo!) and that means it must be time to think about finances for 2012. Herewith an update for elders.

UPDATE: It was announced this morning that the 2012 Social Security COLA will be 3.6 percent.

As I write this on Tuesday, it is expected that on Wednesday – today – the Social Security Administration will announce a cost-of-living-adjustment (COLA) to the SSA benefit. It is expected to be about 3.5 3.6 percent and will be the first increase since 2009.

Now before you run out and spend that money (at 3.5 percent, $37.70/month on the average benefit of $1077) remember that for beneficiaries enrolled in traditional Medicare, with the COLA comes an increase in the Medicare Part B premium which is deducted from most people's Social Security payment.

Due to a “hold harmless” provision in the federal law, Part B withholding cannot be increased if there is no COLA so most people's Part B premium has remained at $96.40 (some are higher for various reasons) during 2010 and 2011.

Meanwhile, however, in the background the Part B premium has been increasing in the past two years even if it was not applied. The actual 2011 premium is $115.40 and the new rate for 2012 has not been announced. Perhaps it will be today with the COLA announcement.

The hold harmless provision still applies; whatever the Part B premium is for 2012, it cannot be larger than your Social Security COLA.

It is important to note that the dates for the annual Medicare open enrollment season have changed this year. Although it has been extended from six to seven weeks, it began earlier – last Saturday, 15 October.

Unlike the past, it DOES NOT RUN UNTIL THE END OF THE YEAR. It ends now on Wednesday 7 December, so mark your calendars.

During this period, here is what you can do:

  • Enroll in a Part D (prescription drug) plan

  • Change from your current Part D plan to a different one

  • Return to traditional Medicare (Parts A and B) from a Medicare Advantage plan)

  • Enroll in a Medicare Advantage plan

  • Change Medicare Advantage plans

You can research and make these changes at the Medicare website or by telephoning 1-800-MEDICARE (1-800-633-4227).

If you are happy with your Advantage or Part D plans, you need do nothing to keep them. But I highly recommend that you compare your current coverage to others available in your state. Premiums and deductibles change year to year as do drug formularies and Advantage plans might have changed their benefit packages, copays and network providers.

For more information:
• The 2012 Medicare & You Handbook [pdf]

State Health Insurance Assistance Program (one-on-one help)

The Medicare Rights Center (information on your rights and benefits)

At The Elder Storytelling Place today, Deborah Greant: Operator!


I'm sure you help a lot of people by posting this information, Ronni. Thanks!

Then after all that, check with your doctor and make sure their office will still take your insurance. One year, mine wouldn't.

Thanks, Ronni, for clear and timely information. A helpful note buried at the end of the print version of the "2012 Medicare & You Handbook" explains that you can opt to receive instead electronic versions (as the PDF file Ronni included in her post as a link).

Here's what to do:

"Choose to get future handbooks electronically. Save tax dollars and help the environment by signing up to get your future “Medicare & You” handbooks electronically (also called the “eHandbook”). Visit to request eHandbooks. We’ll send you an email next September when the new eHandbook is available. You won’t get a printed copy of your handbook in the mail if you choose to get it electronically."

In one fell swoop, the government giveth (SS increase) and the government taketh away (Part B increase), and the leftover pittance is to be spent however one wishes. Oh, boy!

Tamar, I didn't know that I could get the Medicare book electronically and appreciate the information. I always hate getting paper mail and wonder how many trees had to die to make it posible.

I read the Medicare book when it first arrives and then store it all year and never refer to it again. Because you can read it on line and get questions answered electronlically it just makes sense to do so. I will follow the instructions given today and never receive another one by mail.

Thank you Ronni and Tamar for helpful information.

One Part D plan is raising its monthly premium from $36 to $71!! I was not aware of this until I got a call from a client. I found the plan on for several of my clients three years ago.

I called the four people I know who are still in this plan to warn them. None of them had read what the Part D plan had sent them in September.

In Arizona there are 30 Part D plans available for 2012. Some have deductibles. Some cover a drug for $40 while other plans cover the same drug for an $80 co-pay. Some plans are changing very little for 2012, while others are raising premiums or dropping drugs from their formulary.

Why are there so many Part D plans? Does this save Medicare money? Insurance companies manage Part D, but Medicare pays the bills - to the tune of $78 billion in 2010.

I met yesterday with a man who enrolled in a Medicare Advantage plan that gets four stars in the rating system. That means it is supposed to be pretty good. (1 is the lowest rating and 5 is the highest.) However, this man enrolled in the plan without being told that three of his four doctors are not in the network. For January 1st he'll move to a plan that does have all his doctors in its network.

Unfortunately, he is not a unique case, because this highly-rated Advantage plan has its agents sitting in supermarkets and pharmacies, and even has them outside doctors' offices to get new enrollments.

This is one of the issues with Medicare's limited enrollment period - companies and brokers are hellbent to get new customers in just six weeks.

I could go on and on with stories, but I'll stop here.

Thanks for the good information Ronni and Tamar. Every year I check but I didn't catch the December 7th end date, odd date to pick for it.

You know how to make a blanket longer? You cut one end off and sew it on the other. So now the extra SS will go to pay for the increase in Medicare Part B.

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