The Social Security Cost-Of-Living Adjustment (COLA) will increase benefits 3.3% in 2007. That’s about $33 a month for someone with an average benefit of $1,011. But for the first time for many beneficiaries, a substantial portion, if not all, of the increase will be completely offset by the increases in Medicare Part B and Part D premiums. In fact, next year some seniors may even see their Social Security benefits shrink, a downward spiral that, without changes, is likely to continue into the future according to Medicare actuaries.
In an unusual move that received virtually no attention from the media, Medicare’s chief actuaries released a memo stating that Part B and Part D out-of-pocket costs are on an unsustainable course for beneficiaries. The memo stated, “the average out-of-pocket SMI (Part B & Part D) costs would eventually represent an unaffordable share of income for many or most beneficiaries who do not have subsidized coverage through Medicaid or the Part D low-income subsidy.”
TSCL has been warning of this very thing for years, and is pressing for legislation that would provide a more fair Cost-of-Living Adjustment (COLA). The legislation that would use a seniors’ Consumer Price Index, The Consumer Price Index for Elderly Consumers (CPI-E), better accounts for the greater portion of income that beneficiaries must spend on health care costs to calculate the annual COLA. “The Consumer Price Index for the Elderly Act” gained 108 cosponsors as of press date. In addition, TSCL supports measures that would slow rising Medicare premiums and other out-of-pocket costs for seniors and the disabled.
Sign our National COLA Protest Petition now!
Sources: Social Security Administration, October 18, 2006. “Additional Information Regarding Comparisons of Beneficiaries Income and Out-of-Pocket Costs for Medicare Supplementary Medical Insurance, ” Memo from Richard S. Foster, Chief Actuary & Kent Clemens, Actuary, Centers For Medicare and Medicaid Services, May 1, 2006.
November 2006
