October 27, 2020
Honorable Peter DeFazio
United States House of Representatives
2134 Rayburn House Office Building
Washington, D.C. 20515
Dear Representative DeFazio:
On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I write to endorse H.R. 8598, your bill to provide an emergency 3 percent Cost of Living Adjustment (COLA) for Social Security beneficiaries in 2021.
On October 13, 2020 the Social Security Administration announced that the COLA for Social Security beneficiaries in 2021 would only be 1.3 percent, one of the lowest inflation increases in the programs’ history. This will amount to an increase of only about $20 per month for the typical beneficiary, most if not all of which may be erased by increasing premiums for Medicare. Although the premiums for 2021 have not yet been announced, unadjusted inflation in medical care over the 12-month period ending September 2020 totaled 5.8 percent according to the Bureau of Labor Statistics. The Consumer Price Index for healthcare is only one element of the formula for calculating Medicare premiums, but the cost growth in this economic sector presages hefty premium and out-of-pocket cost increases for Medicare beneficiaries next year.
The COVID-19 pandemic has been devastating to older Americans who are especially vulnerable to the disease. Even before the pandemic, many seniors struggled to keep up with ever-rising health care and prescription drug costs, as they are the most significant expense most seniors face. During this pandemic, they have also confronted increased costs for the personal protective equipment and cleaning supplies essential to help keep them safe, as well as increased costs for food deliveries and out-of-pocket costs for COVID-19 treatments if they do become infected. More than half of seniors receive over one-half of their income from Social Security, and it provides at least 90 percent of income for more than one-in-five seniors. These seniors are dependent on a reasonable COLA to maintain even a modest standard of living in retirement.
H.R. 8598 would provide an emergency 3 percent COLA to Social Security beneficiaries in 2021. This amount is comparable to the average COLAs from 1999 to 2009, and although it is unlikely to keep pace with the rising costs of healthcare, it will provide a crucial lifeline for Social Security’s beneficiaries during the ongoing coronavirus crisis. That is why for the longer term, it is essential that Congress provide a permanent fix to the COLA formula that more accurately reflects the real costs seniors face by using a new index, the CPI-E, to calculate future Cost of Living Adjustments.
On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare we endorse H.R. 8598 and stand with you in defending Social Security, the cornerstone of our nation’s financial security.
President and CEO