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Social Security Benefits Will Shrink Unless Medicare Premiums Slow
Alexandria, VA (October 25, 2006) Rising Medicare premiums will soon consume the entire Social Security COLA that seniors receive each year, warns one of the nation's largest nonpartisan seniors groups. "Medicare premiums, which most beneficiaries have automatically deducted from their Social Security, are taking increasing chunks of the COLA," says Ralph McCutchen, Chairman of TREA Senior Citizens League (TSCL). "Because the COLA is being eaten up, the benefits paid to substantial numbers of Social Security recipients will soon stop growing, thus exposing them to inflation," he explains. "In fact, many seniors could be stunned to discover the amount they receive in Social Security in 2007 is less than what they are getting now," McCutchen further states. According to a new analysis performed for TSCL, the estimated growth in Medicare Part B premiums so outpaces the projected growth in the annual Social Security COLA, that Part B premium increases will consume the entire amount of the COLA in as little as five years for seniors with lower benefits. When this occurs, benefits will stop growing, leaving seniors and the disabled to figure out how to cover rising Part D premiums, health care, home heating, gasoline, and other costs. The analysis found that beneficiaries who receive less than $676 a month in 2006, prior to deducting the Part B premium, are at greatest risk. "Fortunately, most seniors who have their Medicare Part B premium automatically deducted from their Social Security enjoy a little-known protection of their Social Security benefits, if Medicare premiums exceed the amount of their COLA," McCutchen explains. "By law, the premium increase is limited to the amount of a person's COLA. This ensures that Social Security benefits cannot be reduced below the amount received the previous year." "Congress did not, however, extend that protection to Part D premiums," McCutchen says. "Seniors who have Part D premiums automatically deducted from their Social Security benefits could see the amount they receive in Social Security in 2007 reduced if their drug plan premiums increase," he says. TSCL believes Social Security recipients would receive a more fair and adequate COLA if it were based on a "seniors'" Consumer Price Index that more accurately reflects the portion of income seniors spend on health care costs. TSCL supports "The Consumer Price Index for the Elderly Act" (H.R.3601) and urges seniors to contact their Members of Congress or candidates running for the House or Senate, to ask for support of more fair COLAs and passage of HR. 3601. ### With 1.2 million members, TREA Senior Citizens League is one of the nation's largest nonpartisan seniors groups. Located just outside Washington, D.C., its mission is to promote and assist members and supporters, to educate and alert senior citizens about their rights and freedoms as U.S. Citizens, and to protect and defend the benefits senior citizens have earned and paid for. Please visit www.SeniorsLeague.org or call 1-800-333-8725 for more information. Distributed by The Senior Exchange, Inc. October 2006 | ||||||||
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