The annual cost-of-living adjustment (COLA) for 2008 may be one of the lowest in the history of the program. This gloomy outlook is from the 2007 Social Security Trustees report that recently forecast the COLA in 2008 would be just 1.4%. For a senior with an average monthly benefit of $1044 in 2007 that's boost of just $14.60 per month next year.
The increase in Medicare Part B premiums, however, could take a substantial chunk, if not all of that. But government experts seem unable to say just how much Part B premiums will be in 2008. Part B premiums pose such a problem, that Congress was told the estimates supplied in the 2007 Medicare Trustees report are "substantially understated." Under more realistic alternate projections based on pending legislative changes, Medicare actuaries say that monthly Part B premiums will increase at least $7.90, from $93.50 to about $101.40 in 2008 for seniors with incomes under $80,000. Actual inflation, and legislation changes that Congress makes prior to the announcement of the 2008 COLA and Part B premium later in the fall will affect the final amounts.
To help seniors better keep pace with rising costs, TSCL supports legislation that would provide a more fair and adequate COLA. Two bills, both called "The Consumer Price Index For Elderly Consumers Act," have recently been introduced. Representative Charles Gonzalez (TX) introduced (H.R. 1953) with Representative Robert Wexler (FL) as an original co-sponsor. In addition Representative Peter DeFazio (OR) introduced (H.R. 2032). Both bills would tie Social Security COLA increases to the CPI for Elderly Consumers (CPI-E) that tracks the spending patterns of older Americans.
By doing so, seniors would see much needed relief in their monthly checks. For example, a senior who retired with an average benefit of $460 in 1984 would have received an additional $10,289 in benefits over the past 23 years had the government used the CPI-E to calculate the COLA. Although the difference in COLAs is modest at first, the effect is cumulative and grows over time. Today the senior who retired in 1984 with a benefit of $460 receives about $910 per month. Had the government used the CPI-E however, that person would receive a monthly check that's $97 higher. TSCL urges you to contact your Representative and ask him or her to co-sponsor "The Consumer Price Index For Elderly Consumers Act," (H.R. 1953) and (H.R. 2032).
To read more about the problem of COLAs failing to keep pace with rising Medicare Part B premiums costs read "Social Security Checks Will Stop Increasing As Medicare Premiums Rise"
Join our Nationwide Social Security COLA Protest
Source: 2007 Social Security Trustees Report, April 23, 2007. 2007 Medicare Trustees Report, April 23, 2007. "Projected Medicare Part B Expenditures Under Alternate Physician Payment Updates," CMS Office of the Actuary, April 2007.
June 2007
