SOCIAL SECURITY’s 1.3% COLA FOR 2021 IMPACTS SEVERAL BENEFIT PROGRAMS
Late last month the federal Social Security Administration announced a comparatively modest 1.3 % “Cost-of-Living-Adjustment” (COLA) increase in Social Security benefits for 2021. As one measure of inflation, this COLA has clearly been impacted by the economic fallout of the COVID-19 pandemic.
For Social Security benefits, the average amount of monthly benefits for retirees will increase, by $20 ($33 for married couples receiving benefits). The increase will impact other programs as well. Here are some examples:
SSI:
The maximum income benefits for low-income Supplemental Security Income (SSI) beneficiaries will also increase by 1.3%, to $794/month for individuals ($1,191/month for married couples). New Mexicans who qualify for any amount of SSI automatically qualify for full Medicaid coverage.
Medicaid:
- Nursing Home, home based “Waiver,” and “PACE” – Since the maximum income eligibility level for these programs is 300% of the SSI level, the individual income maximum will increase to $2,382/month [NOTE: NM’s “PACE” program is operated by InnovAge NM]
- Medicare Savings Programs” (QMB, SLMB, and QI) – These limited benefit Medicaid eligibility categories cover a beneficiary’s Medicare Part B premium (and, in the case of QMB, the Part A premium and Medicare co-pays). It should be noted that while new income eligibility levels for these benefits are not increased until April 1, COLA increases are not counted for eligibility purposes until then.
Medicare/Social Security:
In most years, Medicare Part B premiums increase. In 2021 the “standard”* premium will be $148.50/month (an increase of about $4). For most Social Security beneficiaries, the premiums are deducted from their monthly benefits. But note that according to federal law, the Social Security benefit that you currently receive cannot be reduced because of any increase in your Part B premium.
* The “standard” premium amount is what the vast majority of beneficiaries pay. Medicare beneficiaries with incomes above $87,000 per year ($174,000 for couples) pay higher amounts.
