No COLA will hurt seniors
Published 6:00 am Sunday, October 25, 2015
On Oct. 15, many senior citizens and others receiving Social Security benefits found out there would be no increase in the annual cost-of-living adjustment (COLA). Senior citizens also found out there would be an increase in their Medicare Part B payments.
This is just the third time in 40 years that no adjustment was made in the COLA; all three have happened since 2010. According to law, the monthly Social Security benefit must increase if there has been an increase in the cost of living. This increase is calculated by comparing prices in July, August and September with like months from the year before.
All Americans know the cost of food, medicine and health care has increased over the last year. One of the main reasons that COLA wasn’t adjusted is the drop in gasoline prices, with the average price of gas 90 cents a gallon less when compared to last year’s prices, according to AAA.
The problem we see with this is that many of the people receiving these benefits aren’t driving and need the COLA just to make ends meet on a monthly basis. Many supporters of a COLA increase say that the measure used to gauge inflation doesn’t truly reflect what products older people use.
More than 70 million Americans will be affected by this recent decision of no increase in the COLA. Almost 39 percent of an average elderly person’s income is their Social Security benefits, while 47 percent of elderly unmarried people rely on their benefits to make up to 90 percent of their income.
One other problem is that potentially 30 percent of recipients of benefits will be faced with an increase of around $54 a month in their Medicare Part B plan for their health insurance coverage. Fortunately for 70 percent of elderly Americans, who have the cost of their Medicare Part B premiums deducted out of their check, there will be no increase. The federal “hold harmless” law will prevent the majority of beneficiaries from seeing any deduction in their Social Security payments.
Unfortunately, the COLA announcement affects 4 million of our disabled veterans and 2.5 million federal retires and their survivors.
Americans today, as they get older, are concerned that the Social Security program won’t be around to compensate them for all of the money they have paid into the system. Let’s hope that Democrats and Republicans alike can work together to make sure that it does.