No COLA Increase for 2016

It’s been rumored, but we learned officially on Thursday that there will be no cost-of-living-adjustment (COLA) for 2016. 20 percent of Medicare Part B recipients will now see an increase of over 50 percent in their premiums.

“They face choices like, ‘Do I drop Part B?’” said Walt Francis, an economist and expert on the Federal Employees Health Benefits Program. “Or, for example, some older federal employees who are thinking of retiring next year, they may want to postpone their retirement so they can sign up for Part B a year later.”

The Consumer Price Index (CPI) is the main factor in determining the COLA for the following year. If the third quarter numbers are higher than the previous year’s third quarter numbers, there will be an increase. If they are the same or less, there will be no COLA and benefits will be the same.

There are two bills that were introduced on October 7th, however, that would prevent the large increase in Medicare premiums.

“NARFE implores the White House and Congress to prevent this unfair and disproportionate Medicare premium increase for federal retirees and millions of others,” said Richard Thissen, president of the National Association of Active and Retired Federal Employees, in a statement. “Both the Administration and Congress have the authority to keep the increase from going fully into effect, and I urge them to do so quickly.”

“This is about more than just money,” Thissen said. “It is about basic fairness.”

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