October 14, 2011
Social Security COLA Increase Finally Coming, but Offset by Medicare Premiums
After two years without an inflation adjustment, the Social Security Administration is expected to announce a 2012 cost-of-living adjustment (COLA) of more than 3 percent on October 19th. The annual Social Security COLA is determined by a formula that averages inflation for the third quarter, as reflected by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). No COLA was awarded in 2010 or 2011 due to a spike in the third quarter of 2008, which resulted in a 5.8 percent COLA for 2009. By law, subsequent Social Security payments couldn’t rise until the CPI-W exceeded the 2008 level. Many seniors will see a substantial part of the COLA consumed by a higher premium for Medicare Part B (doctor visits and outpatient services), which usually is deducted from Social Security payments. For those who receive the average benefit of $1,177 per month, a 3.5 percent COLA would lift their gross 2012 payment to $1,218. Assuming that the official Part B premium is, as projected, $106.60, seniors could pay $10.20 more monthly for Part B, reducing their net benefit to $1,207 – an increase of 2.63 percent. However, if you are among the one-third of seniors who receive a monthly benefit between $500 and $1,000, that could translate to a COLA of 2.04 percent after Part B premiums. Part B’s impact on Social Security is a reminder that seniors are affected by different types of inflation than the general population, mainly due to medical costs. To learn more, go tohttp://reut.rs/pr4i0E.
COLAs and the Super Committee
The Congressional Super Committee is said to be taking a hard look at shrinking the national debt through cutting Social Security COLAs, by implementing a formula change using the so-called “chained CPI.” This index reflects changes that consumers make in their purchasing across dissimilar items in response to price changes. The theory is that a spike in gasoline prices will prompt consumers to spend less on fuel, perhaps more on food. And so on. However it has been shown that the current CPI-W measure doesn’t reflect the living costs experienced by the elderly, especially health care costs. The members of the Super Committee are Sens. Patty Murray (D-WA) – co-chair; Max Baucus (D-MT); John Kerry (D-MA); Jon Kyl (R-AZ); Pat Toomey (R-PA); and Rob Portman (R-OH); as well as Reps. Jeb Hensarling (R-TX) – co-chair; Dave Camp (R- MI); Fred Upton (R-MI); James Clyburn (D-SC); Xavier Becerra (D-CA) and Chris Van Hollen(D-MD). If you are a constituent of one of these elected officials, it’s time to speak up! Send an electronic post card explaining why the Committee should not cut Social Security, Medicare, or Medicaid at http://bit.ly/r00CWA.
New Ad Campaign Using Scare Tactics and Misinformation to Confuse Seniors
A group calling itself the American Action Network, chaired by former Republican Minnesota Senator Norm Coleman and initially run by House Majority Leader Eric Cantor’s (R-VA) former chief of staff, is running a $1.6 million campaign by placing newspaper ads and sending direct mail pieces into a number of states and congressional districts, thanking Republican House and Senate members for defending Medicare against the Obama Administration. However, what they are thanking the Republican members for is actually another windfall for drug companies. The Alliance, as well as many other seniors and consumer groups, supports rebates on prescription drug prices for Medicare beneficiaries whose incomes are low enough that they qualify for Medicaid. These are the “dual-eligibles.” The Obama Administration has proposed allowing these rebates in its recommendations to the Super Committee. In fact, current law is a windfall for the drug industry and the proposal in the President’s recommendations to the Super Committee would eliminate it and save the Medicare program $135 billion over 10 years. The advertisement’s contention that Medicare premiums would increase as a result of this change has been viewed with great skepticism by independent analysts. PolitiFact, a Pulitzer Prize-winning media effort to evaluate political claims, has cited experts from Georgetown, Johns Hopkins, and Rutgers who say that the linkage between these prescription drug rebates and higher premiums is highly speculative and vastly overstated. “Sadly, this new campaign aimed at retirees only fuels fear and confusion among the very people it claims to be trying to help,” said Ruben Burks, Secretary-Treasurer of the Alliance.
‘Occupy Wall Street’ Movement: For the Young and the Young-at-Heart
The movement that began as Occupy Wall Street is now sweeping the nation. It seems that every major city in the country is now being occupied, and retirees are playing a key role. In St. Louis today, retirees are gathering with the unemployed and the young on a march to the arch. Once there, they are examining roads and bridges that are in desperate need of repair; the repair job could give thousands of out-of-work Missourians jobs. Up in New England on Tuesday, seniors held a rally in conjunction with the Occupy Hartford protest to show their support for the Occupy Movement. Down South, retirees came out in both Savannah, Georgia – where they braved gale force winds and steady rain – and West Palm Beach, Florida to protest. Texas Alliance members supported the “Occupy Dallas” movement yesterday in a “Jobs Not Cuts – Make Them Pay!” rally outside Rep. Hensarling’s Dallas office. To see an op-ed about how seniors fit into the Wall Street protests in The Miami Herald by Tony Fransetta, President of the Florida Alliance, go tohttp://bit.ly/oeu7ae.
Barbara Easterling: On the Road in Nevada and Ohio
The President of the Alliance, Barbara J. Easterling, crisscrossed the country this week raising awareness on key senior issues. Her visits included the University of Akron in Ohio, where she helped organize a rally and spoke on “Issue 2,” or SB-5, a bill passed by the Ohio legislature which takes away collective bargaining rights of public employees. She helped rally support for its repeal in the upcoming election. On Wednesday, she spoke in Cleveland at a retirement dinner for CWA Secretary –Treasurer Jeff Rechenbach. The next day she was in Las Vegas speaking at an American Postal Workers Union Retirees Conference, where she said, “We cannot allow politicians who have never liked Social Security or Medicare to use this budget climate as political cover for ideological attacks on programs that have kept generations of seniors healthy and out of poverty.”
Medicare Open Enrollment Begins Tomorrow!
The Medicare Open Enrollment Period beings tomorrow, October 15 and goes through December 7. “Open enrollment is seniors’ chance to review their Medicare choices and pick the plan that works for them, or keep the plan they have today,” said Health and Human Services Secretary Kathleen Sebelius. To make that drug and health plan review process easier, the Center for Medicare and Medicaid Services has a rating system for the plans, available atwww.medicare.gov/find-a-plan.