There’s no more closely watched Washington announcement for seniors than word of what the next year’s Cost of Living Adjustment will be for Social Security beneficiaries. While the final decision isn’t announced until October of each year, the annual Social Security Trustees Report usually provides a sneak peak a few months early, as it did last week.
News that seniors should prepare for no increase (or a very small increase) for the second year in a row and the fourth time since 2010 has many understandably worried. Contrary to conservative /fiscal hawk mythology, which dominates so much of the political discourse in Washington these days, American Social Security beneficiaries aren’t living high on the hog. In fact, Americans know first-hand that the average $1,300 monthly Social Security retirement benefit isn’t too generous. They know that this year’s zero cost of living allowance isn’t too generous. They see a growing amount of their Social Security check going to pay for rising healthcare costs and skyrocketing drug prices. It’s no wonder the annual COLA announcement adds to their frustration.
But here’s the thing…Congress didn’t vote or even “decide” to give you a tiny or zero COLA next year. That number is cooked into the law. The only way to change the COLA is to convince your Members of Congress to support a new formula that actually measures the cost of living American seniors face.
This is how current law works:
“If there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was made to the third quarter of the current year. “ …NCPSSM, “Call for COLA Recalculation,” June 2015
That means the Social Security COLA is based on the costs of goods and services purchased by wage earners, not retirees. That’s a real problem since the purchases made by retirees are vastly different than younger Americans still in the workforce.
“The primary source of the difference in spending patterns is medical expenses, which for most years have increased at a higher rate of inflation. Seniors spend three times more than younger consumers on health care, including prescription drugs, medical co-pays and deductibles and non-covered expenses. In fact, older Americans spend 23 percent of their average Social Security check for Parts B and D cost-sharing in addition to paying for health services not covered by Medicare. The following chart illustrates a sample of the increases in health care expenses compared to the increases in Social Security benefits:”
This is why we have long advocated for the adoption of a cost of living formula for the elderly that measures the expenses retirees actually face.
As early as the 1980’s, Congress recognized the problems with using the CPI-W as the basis for preserving the spending power of Social Security benefits, and in 1987 directed the Bureau of Labor Statistics (BLS) to begin work on an index focused on the elderly. As a result, the BLS created the Experimental CPI for Americans 62 Years of Age and Older (CPI-E) and calculated estimates of the index dating back to December 1982. The CPI-E continues to be classified as experimental because its sample size is smaller than the CPI-W, and is therefore subject to a greater sampling error.
The National Committee believes a fully developed CPI-E represents the best hope for correcting problems with the CPI-W for America’s seniors. But Congress must provide the BLS with the funding needed to finish work on the CPI-E and make it the standard for calculating COLA adjustments for Social Security, Veterans, and Federal Civilian and Military retirement benefits.
America’s seniors worked hard for their earned benefits and they deserve to have their standard of living and purchasing power preserved through an accurate COLA calculation.
Nearly 30 million Americans suffer from hearing loss yet a small percentage have hearing aids. Why? Many simply can’t afford the high cost...and Medicare does not cover hearing aids and related audiology services.
Currently, Medicare Part B only covers hearing rehabilitation services for cases caused by an illness or accident. Progressive, age-related hearing loss is not covered, leaving many seniors to pay for their own hearing exams and hearing aids. Hearing aids are incredibly expensive, ranging from $600 to over $5,000 each. These high price tags discourage many seniors from seeking a very basic solution that could dramatically improve their lives.
Research shows even mild hearing loss can double the risk of dementia. Untreated hearing loss also contributes to balance problems and falls, isolation, depression and a greater incidence of stress-related diseases like diabetes and heart disease. Earlier this month, a Report from the National Academies of Sciences, Engineering, and Medicine found that hearing loss is a public health priority requiring national attention.
That’s why the National Committee is proud to join the Center for Medicare Advocacy, Rep. Rosa DeLauro (D-CT), Rep. Jim McDermott (D-WA) and hearing expert Frank R. Lin, M.D., in a briefing today on the need to expand Medicare to include hearing aids and treatment:
“Intervention would reduce the risks which come with hearing loss. This is hugely important in the case of dementia which, with the aging of the baby boomers, is a massive public health issue now. Hearing loss may be one of the few modifiable risk factors that could reduce the risk of dementia; however, hearing health care is still broadly inaccessible and expensive.”...Dr. Frank Lin, M.D., Ph.D., Johns Hopkins School of Medicine and Bloomberg School of Public Health
“As always, there will be the critics who say “we can’t afford this” Well, yes we can. When the Affordable Care Act passed, 716 billion dollars in savings from Medicare were plowed right back into the program to provide expanded services such as preventive care and screenings at no cost to beneficiaries. And there are strategies such as restoring the pharmaceutical drug company rebates for medicines prescribed to dual-eligibles, people on both Medicare and Medicaid, which, according to CBO, could generate 121 billion dollars over ten years. If the Congressional will is there, we know it can be done.”...Max Richtman, NCPSSM President/CEO
Legislation introduced by Reps. Debbie Dingell (H.R. 1653), Jim McDermott (H.R. 5396) and Alan Grayson (H.R.3308) would close this gap in Medicare coverage. This legislation is vital to the health security of millions of Americans.
“Since its implementation in 1965, Medicare has enhanced health care for millions of Americans. But there are still major gaps in coverage. Given the growing numbers of older Americans who suffer from hearing loss, it’s time for that to change,” said Judith Stein, J.D., Executive Director of the Center for Medicare Advocacy.
"We don’t know exactly how much we spend on cases where we’re dealing with depression because they’re isolated...and hearing loss contributes to both. It’s absolutely critical that for an acceptable quality of life that people need to be able to hear the world around them. In order for seniors to keep a good quality of live, just keeping them alive isn’t enough, we must have good hearing and dental care. This is not beyond our capacity to provide this for seniors.”...Rep. Jim McDermott (D-WA)
“We’ve got millions of Americans over 45 effected by hearing loss. If untreated it has devastating impacts on our nation. Medicare coverage should include audiology care, period. The promise of Medicare to keep Americans healthy is at stake. Medicare should cover all the vital health needs of seniors. Why are we arbitrarily leaving some out? There’s no reason for Medicare to remove the head from the body.”...Rep. Rosa DeLauro (D-CT)
Please call your Member of Congress or Sign our Congressional Petition today and tell them:
We need hearing care coverage in Medicare.
Social Security is still fully funded for nearly two decades, a miniscule COLA increase in 2017 likely, and health care reform continues to preserve Medicare’s solvency.
“What’s likely to be missing in headlines about today’s Social Security Trustees Report is that the program remains well-funded with total income, again, projected to exceed expenses. However, in order to head off a benefit cut in 2034 Washington should embrace the growing movement to lift the payroll tax cap and expand benefits for the millions of seniors struggling to get by on an average $1,300 retirement benefit.
The Trustees also project there will be a tiny .2% cost of living adjustment next year yet Medicare premiums will increase in 2017. Seniors continue to see their modest Social Security benefits eaten away by growing healthcare costs which illustrates, once again, that the current Social Security COLA formula isn’t accurately measuring seniors’ expenses. Congress needs to adopt a fully developed CPI for the elderly (CPI-E) and begin work on the many Social Security expansion bills now languishing in the House and Senate.”...Max Richtman, NCPSSM President/CEO
Here are some of the key points in the 2016 Trustees Report:
- Trustees project Social Security will be able to pay full benefits until the year 2034, the same as projected last year. After that, Social Security will still have sufficient revenue to pay about 79% of benefits if no changes are made to the program.
- Social Security remains well-funded. In 2016, as the economy continues to improve, Social Security’s total income is projected to exceed its expenses. In fact, the Trustees estimate that total annual income will exceed program obligations until 2020.
- Trustees project a .2% Cost of Living Adjustment increase.
- The Trustees report there is now $2.81 trillion in the Social Security Trust Fund, which is $23 billion more than last year and that it will continue to grow by payroll contributions and interest on the Trust Fund's assets.
On Medicare, the 2016 Trustees report shows slowing the growth of health care costs has improved Medicare’s Trust Fund
You can also read:
- Medicare Part B premiums are projected to increase by only a very small amount for about 70 percent of beneficiaries in 2017 from $104.90 to $107.60. The standard monthly premium is projected to increase from $121.80 to $149.00 while the annual deductible is projected to increase from $166 to $204 for all beneficiaries.
- Medicare solvency remains greatly improved thanks to passage of healthcare reform, with the program paying full benefits until 2028, 11 years later than was projected prior to passage of the Affordable Care Act. However, this is two years earlier than projected in 2015.
Treasury Secretary Jack Lew's comments
The Social Security Trustees Report
The Medicare Trustees Report
The Economics Policy Institute also has a terrific description of the political spin which always accompanies the release of these reports.
Each day 10 thousand Americans become eligible for Medicare. The aging of the baby boom generation certainly isn’t a surprise to anyone and yet, instead of boosting programs to serve this increased need, Republican Congressional leaders continue to slash and now eliminate programs designed to help millions of aging Americans and their families.
The latest target is one of the nation’s most effective consumer resources for seniors, the Medicare State Health Insurance Assistance Program (SHIP).
“The SHIP network provides critical information upon which people with Medicare rely to make informed decisions about their coverage options and enrollment decisions,” says Judith A. Stein, Executive Director, Center for Medicare Advocacy, Inc. “The SHIPs are critical to providing assistance with these increasingly complicated choices. People with Medicare and their families from all over the country depend on SHIPs as the key source of unbiased guidance.”
Incredibly, the Senate Appropriations Committee approved a Fiscal Year 2017 budget appropriations bill that completely eliminates the $52.1 million in funding for SHIP.
“Senate appropriators have turned their backs on a growing number of people who will need SHIP services to navigate the complexities of Medicare coverage by proposing to eliminate program funding. This kind of penny-wise, pound-foolish lawmaking will threaten the economic security of millions of Medicare beneficiaries and their families.”…Max Richtman, NCPSSM President/CEO
“Understanding the complexities and decisions required for Medicare is an overwhelming, isolating experience for seniors, people with disabilities, and caregivers who don’t know where to get help. For millions of Americans, their only option for that help is their SHIP. If SHIPs disappear, there is no replacement for the critical services they provide. The loss of SHIPs threatens the economic security and the health of all current Medicare beneficiaries and the thousands who become eligible every day.”…James Firman, President and CEO of the NCOA
"Eliminating SHIPs would leave millions of older Americans, people with disabilities, and families who need help comparing coverage options, appealing denials, applying for financial assistance, and navigating an evolving and increasingly complex program stranded—with nowhere to turn. With 10,000 Baby Boomers aging into Medicare each day, it is imperative that the U.S. House of Representatives reject this unprecedented, nonsensical cut."…Joe Baker, President of the Medicare Rights Center
In case you have any doubt about the need for SHIP services consider this: today’s Medicare beneficiary must choose among more than 20 prescription drug plans, an average of 19 Medicare Advantage plans, as well as various Medigap supplemental insurance policies—all with different premiums, cost sharing, provider networks, and coverage rules. SHIPs also help beneficiaries resolve fraud and abuse issues, billing problems, appeals, and enrollment in low-income health assistance programs. In 2015, SHIPs provided one-on-one assistance to more than seven million individuals and in the past decade, the number of beneficiaries receiving personalized counseling from SHIPs has tripled.
Not a day goes by that we don’t hear horror stories of seniors and their families who face severe economic hardship and even bankruptcy because of a bad choice made in their healthcare options. That’s exactly why SHIP is so vitally important.
We’re proud to join a coalition of aging organizations including; The Center for Medicare Advocacy, Medicare Rights Center, and National Council on Aging (NCOA) to fight for a reversal of this outrageous Senate move to eliminate seniors’ access to desperately needed SHIP services.
We urge you to call your Senators and Representative and tell them: Americans Need SHIP.
As Hillary Clinton declared victory after winning four of the six primaries last night, the Democratic ticket for President solidified. While Donald Trump has been in that position for a while now, his campaign has now entered rough political waters...again.
And so it will likely go until November...
Unfortunately, what’s lost as the media and political punditry focus on the horserace, who’s stuck their foot in it today and the inevitable mud-slinging that Trump has already promised to begin on Monday, are the important policy differences between candidates. There are plenty of them, especially on economic issues impacting average Americans.
Bernie Sanders’ campaign ensured that issues of income inequality, economic security and fairness, social justice and boosting Social Security remained top of the political agenda. He vowed to continue that effort:
“Our campaign from day one has understood some very basic points and that is first, we will not allow right-wing Republicans to control our government. And that is especially true with Donald Trump as the Republican candidate. The American people, in my view, will never support a candidate whose major theme is bigotry, who insults Mexicans, who insults Muslims and women, and African-Americans.
But we understand that our mission is more than just defeating Trump; it is transforming our country. The vast — the vast majority of the American people know that it is not acceptable that the top one-tenth of 1 percent owns almost as much as wealth as the bottom 90 percent. We are going to change that. And when millions of Americans are working longer hours for lower wages, we will not allow 57 percent of all new income to go to the top 1 percent...
We will not allow Donald Trump to become President of the United States."
When it comes to Social Security and Medicare, the differences between Hillary Clinton and Donald Trump are stark. Clinton supports expanding benefits, while Trump promises he won’t cut Social Security. That position has given the GOP party establishment heartburn but Trump has repeatedly acknowledged the GOP can’t win by promising benefit cuts and so he’s not:
"As Republicans, if you think you are going to change very substantially for the worse Medicare, Medicaid and Social Security in any substantial way, and at the same time you think you are going to win elections, it just really is not going to happen," Mr. Trump said, adding that polls show that tea partyers are among those who don't want their entitlements changed." Donald Trump, 2013 CPAC speech, Washington Times
“You know the Republicans also have to get elected, you do know that. And if you watch Bernie, and if you watch Hillary, they don't only want to not cut, they want to increase Social Security.” Donald Trump, Morning Joe, February 2016
And yet his policy staff says the Trump administration is open to “entitlement changes.”
“After the administration has been in place, then we will start to take a look at all of the programs, including entitlement programs like Social Security and Medicare. We’ll start taking a hard look at those to start seeing what we can do in a bipartisan way.”
“...I think that whoever [is] the next president is going to have a horrible time in dealing with this, because those entitlements will race to the front of all the economic issues we have in this country.” Sam Clovis, Trump campaign Chief Policy Advisor, May 2016
You can read more about the Trump campaign positions here, here and here.
Hillary Clinton has a long history of fighting the privatization of Social Security and Medicare, something Donald Trump supported in his first Presidential campaign. These days, that position alone is not enough but Clinton has also articulated a real plan to boost benefits, provide caregiving credits, lift the payroll tax cap and improve spousal benefits. She also opposes Trump’s plan to repeal the Affordable Care Act which means seniors in Medicare would lose billions in drug savings, well-care visits, lower premiums and improved care.
There will be many more months to draw clear comparisons between these candidates’ positions on Social Security, Medicare and Medicaid as the Presidential campaign moves to the conventions and their platform debates.
The National Committee’s SeniorVote 2016 will keep you updated and candidates’ accountable on their plans for programs which touch the lives of virtually every American family.You can sign up for email alerts to be sure the latest news comes straight to your mailbox.
Have a Social Security or Medicare question?