We're headed for an 8.7% Social Security COLA
But the final cost-of-living adjustment number won't be known until October.
Inflation figures released today for the month of August suggest that the Social Security cost-of-living adjustment for 2023 will be 8.7%.
That’s based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) figures for August and July. The final COLA is determined by averaging together the CPI-W figures for the third quarter of the year (which will include October), and then comparing that figure with the same data last year.
Overall inflation remained stubbornly high last month. Some analysts have been expecting the Social Security COLA to come in at 9% or higher, but the CPI-W has dropped for two consecutive months, notes the Senior Citizens League. Still, an 8.7% bump would be the largest since 1981, when the COLA was 11.2%. During much of the last decade, the COLA was two percent or less, and there were two years of zero COLAs - and they averaged 2.2% for the entire decade.
Additional good news: it appears that most of the 2023 COLA will flow through to beneficiaries, because the standard Medicare Part B premium increase (which won’t be released until November) likely be very small, and it might just stay flat at $170.10. That’s due to the recent mess surrounding Aduhelm, the controversial, costly drug for treating Alzheimer’s.
Aduhelm is administered in outpatient settings - that means the cost would be borne by Part B, not the Part D prescription drug plan. Medicare officials factored in anticipated Aduhelm costs when the agency announced a whopping 14.5% increase in the standard Medicare Part B premium for 2022, to $170.10 per month.
Medicare ultimately decided to sharply limit coverage of Aduhelm — but let stand the large Part B increase, citing administrative hurdles to a mid-year rebate to the tens of millions of Americans on Medicare. That means Part B enrollees are being overcharged roughly $10 per month this year, and Medicare has stated that the 2023 premium will be adjusted accordingly.
I’m working on an in-depth story about the 2023 Social Security COLA that will be published around the time that the final figure is announced next month. Stay tuned.
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