Today, the Social Security Administration announced a modest 1.6% cost-of-living adjustment (COLA) for 2020.
The 1.6% increase for 2020 follows a 2.8% increase for 2019 and a 2% increase for 2018.
The yearly COLA amount is based on increases in the Consumer Price Index which measures the cost of inflation for goods, but not health care. Most people receiving Social Security are retired or disabled. For most, health care is their biggest expense, and it is one of the fastest rising costs in America. The average Social Security check in 2019 was $1,460 a month. Next year's increase will raise the average payment by $23.40.
Premiums for Medicare Part B are automatically deducted from the checks of many Social Security recipients. Medicare premiums are expected to rise $8.80 a month. This will offset the increase which is meant to offset consumer price increases and doesn't take health care into account.
Some are proposing that Social Security begin using a price index for the elderly, called CPI-E, that would take into account items such as health care costs, which have increased at a greater rate than inflation overall. But so far, no action has been taken on this proposal.
Increases will go into effect on the first check in January of 2020.