The LuLac Edition #917, Aug. 24th, 2009
Millions of older people face smaller Social Security checks next year, the first time in a generation that payments would not rise. The trustees who oversee Social Security are projecting there won't be a cost of living adjustment (COLA) for the next two years. That hasn't happened since automatic increases were adopted back in 1975. By mandate, Social Security benefits cannot go down. But monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to increase. "I will promise you, they count on that COLA," said Barbara Kennelly, a former Democratic congresswoman from Connecticut who now heads the National Committee to Preserve Social Security and Medicare. "To some people, it might not be a big deal. But to seniors, especially with their health care costs, it is a big deal." Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels. Advocates say older people still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income.
This situation comes at a very bad time for the Obama administration. With the GOP’s claims that Medicare will suffer under the new Health Care Reform as well uncertainty among Seniors on the economy, this can only add confusion and more fear to the debate. Plus locally, Blue Cross of Northeastern Pennsylvania has asked for an increase in its non group Medicare Supplemental plans. If they get the increase, seniors will actually be losing money and economic ground by paying that higher premium.