Medicare erodes pension hike

WASHINGTON – More than 47 million retired and disabled people will receive a 2.7 percent cost-of-living increase – an average of about $25 a month – in their Social Security benefits starting in January, the government announced Tuesday. For America’s 47 million Social Security recipients, including nearly 6 million disabled workers, checks will jump from an average of $930 a month to $955.

But for many of those who participate in Part B of Medicare, which covers visits to doctors’ offices, almost half of the benefit increase will disappear before they ever see it. The government announced last week that the cost of the Medicare premium, which typically is deducted from Social Security checks, would rise by about $11.60 a month next year, a 17.5 percent increase.

“Far too many Social Security beneficiaries will see (the benefits increase) partially or completely eroded by the Medicare Part B premium increase,” said William Novelli, chief executive officer of AARP, a senior citizens lobby.

At the same time, David Certner, AARP’s director of federal affairs, said the cost-of-living adjustment “is always welcome news. Those 2 percent to 3 percent a year make a huge difference.”

The Social Security adjustment, which was calculated to equal the increase in the consumer price index from the July-September period in 2003 to the same three months in 2004, will be the largest since benefits rose by 3.5 percent in January 2001.