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Notch Bulletin: For Many Notch Babies, Medicare Premium Will Obliterate COLA
For seniors with lower benefits, like many Notch Babies, the 2005 Cost-Of-Living Adjustment (COLA) won�t come close to protecting benefits. Medicare premiums and other health care costs are rising many times faster. This problem is worse for Notch Babies, who received lower benefits at retirement than other seniors who had similar work and earnings. Because of this, their annual COLA increase has also been correspondingly lower over the years. At the same time, however, many Notch Babies are at the age where more serious or chronic health conditions occur, requiring greater out-of-pocket health care expenditures. The Notch Babies (and other seniors) who rely on Social Security for most or all of their income feel squeezed the most. Record deficits make the situation more difficult because Congress is pressured to reduce spending. We believe that Congress may try to do this in 2005 by adopting the �chained� CPI, to calculate COLAs. According to a recent analysis by the Congressional Budget Office, the new �chained� CPI -- if implemented in 2005 -- would cut Social Security COLAs by $22.3 billion by 2010. No senior can afford a COLA any lower than it already is, and least of all Notch Babies. TSCL is not only opposed to plans that would cut COLAs but also continues to lobby for a more fair COLA, one that is more appropriately based on changes in senior costs. TSCL is also studying legislative proposals to protect COLAs from huge Medicare premium increases. TSCL believes that Congress could cut billions in costs through better efforts to cut waste, fraud and abuse in government programs and agency spending. The Office of Management and Budget has estimated that in fiscal year 2003 improper payments exceeded $35 billion annually. The General Accountability Office (GAO) noted that these improper payments �often result from a lack of or inadequate system of internal controls.� Your continued contact with Members of Congress in 2005 remains the key in helping us to sway votes on Notch Reform and a more fair COLA. Thanks to all who have supported our legislative initiatives this past year. Sources: CBO Cost Estimate: Bipartisan Retirement Security Act of 2004, CBO, July 21, 2004. Fiscal Year 2003 U.S. Government Financial Statements, General Accountability Office, July 8, 2004. September 2004 | ||||||||
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