COLAs 2.6% While Health Insurance Climbs 15%

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COLAs 2.6% While Health Insurance Climbs 15%

Health insurance premium increases for 2002 are likely to make jaws drop. Meanwhile Social Security recipients can expect little relief from annual Cost-of-Living Adjustments (COLAs). The COLA in 2002 will raise monthly benefits by only 2.6% while Social Security recipients are likely to see their health insurance premiums go up by a staggering 13% to 45% according to several insurance industry surveys. The surveys further estimate that spending on prescription drugs is expected to rise by as much as 15% to 20% in 2002.

The average Social Security benefit will increase by just $22 per month to $874 from $852, leaving many seniors to dig deeper than ever to find ways to afford needed health care. The rising costs are causing an erosion of employer-provided health benefits. According to a study by the Kaiser Family Foundation in 2001 only 34% of employers provide retiree health care benefits, down from 41% in 1999 and 66% in 1988.

Sources: Social Security Administration, October 19, 2001. Managed Care Health Market Report, "HMO Premiums to Soar 15% in 2002," August 14, 2001.

If you would like to read more about your Social Security COLA, click here: http://tscl.org/SSCOLA.asp

November 2001

This article first appeared in Volume 6, Issue 11 of `The Social Security and Medicare Advisor` newsletter (November 2001). To receive future editions of `The Advisor` in its special, free e-mail version, please click here.