17% Medicare Increase, 1.1% COLA Means Social Security Checks Will Not Increase For Many in 2005

Send this article to a friend.

Printer friendly version.

17% Medicare Increase, 1.1% COLA Means Social Security Checks Will Not Increase For Many in 2005

Alexandria, VA (April 20, 2004) - Seniors will soon see the cost of new Medicare drug legislation, soaring federal deficits, and recent tax cuts show up in the form of Social Security checks that will not increase, warns a national seniors' organization. "The Medicare and Social Security Trustees recently estimated that Medicare premiums for 2005 will skyrocket by more than 17%(1), and that the Social Security Cost-Of-Living Adjustment (COLA) will be only 1.1%(2)," notes George Smith, Chairman of TREA Senior Citizens League (TSCL). "These estimates not only prove that the new Medicare prescription drug legislation does little to protect seniors from runaway health care costs, but that the COLA is a total failure in doing so as well."

The Medicare Trustees estimated that Medicare premiums will jump a staggering 17%, or $11.50 per month -- from $66.60 in 2004 to $78.10 in 2005.(3) On the other hand, the $922 average monthly Social Security benefit(4) would increase by about $10 per month -- not enough to cover the big jump in premiums. "For many seniors, next year's COLAs will be wiped out and as a result of their Medicare premium increase, their Social Security payments will NOT increase," Smith observes.

New Medicare prescription drug legislation is in part responsible. Even though the main drug benefit does not start until 2006, the legislation gives an immediate boost in reimbursements to doctors, Health Maintenance Organizations (HMOs), hospitals and other providers, driving up program costs correspondingly. Seniors pay 25% of the Medicare Part B premium and the government pays the other 75%.

Smith says that TSCL is receiving a growing volume of mail from members and supporters who are angry because their COLAs don't cover skyrocketing Medicare premiums and other health care costs. One supporter wrote:

"My net COLA raise for 2004 was $1.00. My husband's was $7.00. That sure buys a lot, doesn't it? It certainly doesn't come from the REAL WORLD WE LIVE IN TODAY. Drugs, auto insurance, groceries, utilities, gas/auto and heat have gone up, yet the government tells us things have come down -- well not where I live."
"The government could cut costs for both seniors and Medicare by allowing seniors to import less costly prescription drugs from Canada," Smith notes. "We are continuing our push for passage in the Senate of strong prescription drug importation legislation. We have extensive information on our website (www.tscl.org) about this issue, and that material has generated questions and requests from Congressional offices as well as other entities about our support." TSCL is also vigorously fighting for passage of legislation that would provide a higher and fairer COLA using a "seniors' only" index, The Consumers Price Index for Elderly Consumers (CPI-E).

"We encourage seniors to contact their Members of Congress and let them know how the failure of Medicare to contain health care costs, and the COLA's failure to protect your Social Security, affects them. Ask your Members of Congress to support the importation of less costly prescription drugs and a more fair COLA for seniors," Smith urges.

TSCL is a national group of politically active seniors concerned about the protection of their earned Social Security, Medicare, military, and other retirement benefits. TSCL members participate in a number of grassroots lobbying and public education campaigns designed to try to ensure governmental bodies, including the Social Security Administration and the Centers for Medicare and Medicaid Services, live up to their commitments. For more free information on our organization, please contact TREA Senior Citizens League, Department S707D, 909 N. Washington St., Suite 300, Alexandria, VA 22314, or visit our website at: www.tscl.org.

(1) 2004 Medicare Trustees Report, March 23, 2004, page 17.
(2) 2004 Social Security Trustees Report, March 23, 2004, page 98.
(3) 2004 Medicare Trustees Report, March 23, 2004, page 164.
(4) Social Security Announces 2.1% Benefit Increase for 2004, Social Security Administration, October 16, 2003.

Distributed by The Senior Exchange, Inc.
Serving The Mature American With Timely, Low-Cost, Self-Help Information

April 2004