The Bureau of Labor and Statistics reported Thursday, Sept 15th "The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 4.3 percent over the last 12 months to an index level of 223.326 (1982-84=100). For the month, the index rose 0.3 percent ..."

If CPI-W holds this means that 73% of Medicare Beneficiaries may see an increase in their premium from $96.40 to roughly $108. 20 in 2012 (8.5% increase) as well as an increase in their Social Security Benefit (3.6%).   The remaining 27% should see a combined increase in their Social Security benefit of $9.85% because their Medicare premium is likely to decrease in 2012

CPI-W is used to project Cost of Living Adjustments (COLA) prior to announcing increases in 2012 Social Security payments and Part B premium increases.

• In 2008, the Q3 average of CPI-W was 215.495. In the previous year, 2007, the average in Q3 of CPI-W was 203.596. That gave an increase of 5.8% for COLA for 2009.
• In 2009, the Q3 average of CPI-W was 211.013. That was a decline of 2.1% from 2008, however, by law, the adjustment is never negative so the benefits remained the same in 2010.
• In 2010, the Q3 average of CPI-W was 214.136. That was an increase of 1.5% from 2009, however the average was still below the Q3 average in 2008, so the adjustment was zero.

•In 2011, the Q3 average of CPI-W was 223.326. That was an increase of 3.6% for next year (the current 223.326 divided by the Q3 2008 level of 215.495).

Remember that Medicare did not announce Part B premiums until the day after the federal elections last year (Nov 3, 2010).  

This is an early look. What matters is CPI-W during Q3 (July, August and September).