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Higher Medicare premiums could erase part of Social Security increase

Star Tribune/Associated Press, October 20, 2011

That didn't last long. About 55 million Social Security recipients will get their first increase in benefits next year since 2009 — a 3.6% raise. But higher Medicare premiums could erase part of it. For some, higher Medicare Part B premiums could wipe out as much as a fourth of their raise from Social Security, according to projections by the trustees who oversee the programs. Medicare is expected to announce 2012 Part B premiums as early as next week. The premiums, which cover doctor visits, are deducted automatically from monthly Social Security payments. The Social Security Administration announced the pay increase Wednesday, offering a measure of comfort to millions of retirees and disabled people, many who have seen their retirement accounts dwindle, home values drop and out-of-pocket medical costs rise in the years since their last raise. Starting in January, 55 million Social Security recipients will get increases averaging $39 a month, or just over $467 for the year.