FEDS ANNOUNCE 2014 CPI: 1.5%

No Increase For Medicare Part B Premium

OCTOBER 30, 2013: Today, the Social Security Administration announced that the Consumer Price Index (CPI) for the previous 12 months (September ’12 to Oct ’13) is 1.5%. The announcement follows recent reports by the Federal Reserve detailing historically low inflation.

In addition, on Monday the Center for Medicare Services (CMS) announced that monthly Medicare Part B premiums go unchanged in 2014 for most Medicare enrollees at $104.90 – the same as 2013. However, some retirees at higher income levels light see a slight increase in monthly Medicare rates due to the premium-indexing put in place in 2006 under President George W. Bush.

One unexpected factor, cited in the low CPI, is the decreased price of gasoline, lowering transportation costs by 2% over the past year.

Beyond impacting the Social Security checks of those members who do receive a monthly federal benefit, the CPI is also a factor in COLA payments made to public retirees and survivors.

State retirement law allows for an annual 3% COLA to be granted on a maximum base pension ranging from $12,000 to $18,000, depending upon which retirement system a member belongs. State and Teacher retirees have a COLA base of $13,000, meaning the maximum increase with a 3% COLA is $390 a year.

The legislature and governor set COLA benefits for state and teacher retirees, while the local COLA is under the annual purview of the local retirement board. The local COLA base is increased by the local legislative body, i.e. city council, town meeting, county advisory council, etc.

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