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Benefits News
Cost-of-living Adjustments for 2001 Announced by Social Security

By Rob Langelier

January 2001

A cost-of-living adjustment (COLA) for 2001 was recently announced by Social Security. Social Security Disability Insurance (SSDI) recipients, Supplemental Security Income (SSI) recipients, and Social Security Retirement recipients all received a monthly benefit increase of 3.5 percent as of January 1, 2001.

This increase means that the average SSDI income will rise from $759 a month to $786 a month, in real dollars. This figure reflects the national SSDI income average only. Actual recipient increases will vary, depending on the recipient's SSDI income. SSI recipients who are paying their fair share of living expenses and who were previously eligible for the $692 rate will begin to receive $712 a month in income.

Recipients who pay their fair share of living expenses, and who are eligible for both SSDI and SSI, will receive $732 a month as opposed to last year's $712 a month. Social Security and SSI recipients should have received notices of their specific increases in December 2000. These notices should be saved because they are useful verifications of income. They are helpful when (or if) clients need to apply for other public benefits programs that require proof of income.

COLAs have been used to add Social Security benefit amounts since 1975 and are an important part of keeping recipient incomes up-to-date with the rates of inflation. SSDI and SSI rates increase automatically each year based on the COLA. Social Security calculates the yearly COLA by using the Consumer Index for Urban Wage Earners and Clerical Workers. This index is also known as the CPI-W. This year's COLA, while reflecting the rate of inflation also projects the revision to the CPI released by the Bureau of Labor Statistics on Sept. 28, 2000.

For more information about this year's COLA, visit The Body's Social Security Web page at The COLA notice can also be found at the Social Security's Web site

Medicare Part B Monthly Premium Rises to $50

An increase in the Medicare Part B monthly premium was recently announced by the Health Care Financing Administration (HCFA), the federal agency responsible for Medicare. The new increase will raise the cost of Part B insurance coverage from $45.50 a month to $50 a month beginning January 2001. The last increase in the Medicare Part B premium occurred in 1997, when the cost of coverage was raised from $43.80 a month to $45.50 a month.

Many Medicare ecipients are unaware that there are two components to Medicare coverage: Part A and Part B. Part A insurance, also known as hospital insurance, covers costs associated with in-patient care. Part A premiums remain free to Social Security Disability Insurance recipients as well as for Medicare eligible retirees. Medicare Part B insurance, sometimes called doctor's insurance, covers outpatient care and has traditionally had a monthly charge for coverage. Although this increase may seem relatively minor, it has the potential to adversely affect many Medicare recipients who are on fixed incomes.

If you are having difficulties paying for the Part B premium, consider applying for Medicare Buy-In assistance. Medicare Buy-In is actually not one program but a collection of programs that help pay for all or varying portions of the Part B premium as well as other costs associated with Medicare coverage. In order to qualify for Medicare Buy-In assistance, applicants must be eligible for Medicare, have less than $6,000 in assets, excluding one house and one car, and must meet strict monthly income limitations. There are five Medicare buy-in programs, described below.

Anyone interested in the Medicare Buy-In programs should contact their local county social services or welfare offices for more information. In Los Angeles, interested parties should contact the Department of Public Social Services toll free at (877) 597-4777. For copies of mail-in applications and for more information, contact AIDS Project Los Angeles Medi-Cal Specialist Rob Langelier at (323) 993-1478 or by e-mail at

Rob Langelier is a Medi-Cal specialist in AIDS Project Los Angeles' Benefits Program. He can be reached by calling (323) 993-1478 or by e-mail at

This article has been reprinted at The Body with the permission of AIDS Project Los Angeles (APLA).

This article was provided by AIDS Project Los Angeles. It is a part of the publication Positive Living. You can find this article online by typing this address into your Web browser:

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