December 5th, 2016
While the government announced earlier this year that the cost-of-living adjustment (COLA) for Social Security (SS) would be a paltry .3% they didn’t tell you the whole story. What they didn’t tell you, until a few days ago, is that no one is going to even see the minuscule $5 a month that the small raise represents. The letter most of us received from Social Security in the last few days told us that our checks would stay the same and some of us found out that our checks would actually be reduced. It’s because the Medicare Part B premiums have gone up dramatically and the way the government calculates our COLA is flawed.
Obamacare premiums aren’t the only thing that are rising dramatically. Medicare Part B, the part of Medicare that covers doctors and outpatient care, went up 22%. CMS, the government agency that oversees Medicare, dipped into their reserves and reduced the increase to 10% so, since there is a stop loss instituted in 1987, the SS check for 70% of SS recipients will remain the same in 2017. That’s small consolation considering the increase in healthcare costs and in other areas of our economy experienced by seniors in 2016. The news is even worse for the other 30% who will see their checks reduced by around $10 for some and much more for wealthier seniors.
Washington continues to tie itself into knots over the COLA and it is because the current way the COLA is calculated is flawed. It uses the buying habits of an urban wage earner, not mature Americans. It has been flawed for decades and has cost seniors millions of dollars each year. The government continues to break its promise to maintain the purchasing power of your monthly Social Security check so each year you’ve been forced to live on less and less. RetireSafe doesn’t think it’s right and we have a solution.
RetireSafe, a few years ago, single handily supported the CPI for Seniors ACT which would calculate a fair and correct COLA for seniors. It didn’t guarantee a minimum increase, it didn’t give every senior $250 dollars if the COLA happened to be zero one year, it wasn’t a handout. All it does is instruct the Bureau of Labor Statistics, the people who calculate the COLA, to calculate a fair and correct COLA for seniors that is based on the true buying habits and flexibility of older Americans. One that calculates how much of their disposable income seniors spend on healthcare, on Medicare premiums, on heating the house, on Medicine, on modifying their house in response to the disabilities of old age. All the bill does is calculates a COLA that truly maintains the purchasing power of the monthly Social Security check.
We have pushed to get the bill introduced in each Congress and the bill sponsor, Representative John “Jimmy” Duncan from Tennessee, has done that. The bill number is HR 3074 and there are 16 co-sponsors, both Democrats and Republicans, who think it’s a great idea. We hope that the new administration will take notice of this important bill when it is re-introduced next year. We will be asking for your help next year to encourage your Senators and Representative to support a fair COLA. We think it’s the right thing to do.
Thair Phillips – President