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Insider's Report: There’s good news and bad news about next year’s COLA
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While beneficiaries will receive a rare 5.9% Social Security Cost-of-Living Adjustment (COLA) in 2022 — which amounts to an average $92 monthly increase in benefits — it will be quickly eaten up by higher Medicare premiums and the rising cost of everything from food and gas to housing and out-of-pocket health care expenses.
The fact that this is the highest increase since 1982 does not speak well for Social Security’s ability to keep pace with seniors’ expenses. The average COLA for the past ten years was only 1.65%. In three of the past 12 years the COLA was zero. Were it not for COVID-related inflation, the COLA for 2022 likely would have been more in line with the paltry increases of decades past.
The health and financial security of millions of Americans depends so much on getting an adequate Social Security Cost-of-Living Adjustment (COLA) next year and every year. Yet, the current COLA formula fails to consider that seniors must spend a significantly larger share of their income on health care and housing expenses.
In fact, for years older Americans have endured a declining standard of living due to a deeply flawed COLA. Social Security is basing “raises” off the spending habits of working-age urban and clerical workers — not off of the very different spending patterns of seniors who are actually receiving Social Security benefits!
That’s why the National Committee is calling on lawmakers to pass the “Fair COLA for Seniors Act of 2021” H.R. 4315, that adopts the Consumer Price Index for the Elderly (CPI-E), which measures inflation on the goods and services that seniors actually rely on — especially health care, groceries and housing.
America’s seniors have paid into the system their entire working lives. They shouldn’t have to walk a financial tightrope every month, in constant fear of falling into poverty. This Congress, representing the wealthiest country in the world, must do better for its older — and most vulnerable — citizens.
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| Good Bills |
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The National Committee endorses the “Fair COLA for Seniors Act of 2021” H.R. 4315, introduced in the House by U.S. Representative John Garamendi (CA-03). This bill would use of the Consumer Price Index for the Elderly (CPI-E) for the purpose of determining Social Security Cost-of-Living Adjustments (COLAs). Using the CPI-E will ensure that benefits for retirees are not diminished by rising costs in the goods and services that seniors disproportionately consume.
Current measures of inflation fall short in that they do not adequately take into account the rising costs incurred by retirees in consumer categories such as housing and health care. This bill represents a bold step on behalf of seniors by safeguarding the future value of federal retirement benefits.
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| Medicare Open Enrollment Has Begun |
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Have you looked at your Medicare Part D and Advantage plans to ensure they still work for you? Each year, both Medicare Advantage and Part D plans make changes to their benefits, cost-sharing, provider networks and monthly premiums. That means the plan that best served you in 2021 may not be the best plan for you next year.
We certainly understand why so many beneficiaries choose inertia rather than the tedious and often challenging task of comparing the various private insurance plans offered in Medicare Advantage and Part D. However, given that out-of-pocket health care costs consume 23% of the average Social Security check, it’s especially important that beneficiaries take the time to ensure last year’s plans still meet their needs. And to help you or a loved one navigate through the sometimes complex Medicare program, you can find unbiased help from trained and knowledgeable counselors through your local State Health Insurance Assistance Program (SHIP).
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| Ask Web |
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Our resident Social Security expert, Webster Phillips — a Senior Policy Analyst for the National Committee and a 31-year veteran at the Social Security Administration — is here to answer your questions about Social Security.
You can either search our archives for valuable advice on a broad range of concerns or submit your question here.
This week's question is: I turned 65 and my Social Security check was reduced $144.60 for Medicare coverage. Will my next COLA increase be based on the amount of money I was receiving prior to the Medicare reduction or the amount after the reduction?
Click here to read the answer.
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| Poll Results! |
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In the last issue of Benefits Watch we asked our readers the following question:
Are you finding it difficult to afford the rising cost of housing, groceries and gas?
The results from our recent poll are fascinating, but they’re only available to National Committee members! Join the National Committee today and we’ll immediately give you the results of this important poll.
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Ask Web
Whether you’re currently retired or approaching retirement, we can help answer your questions and provide valuable advice on Social Security. |
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Join Now
Your support sustains our campaigns in Washington to protect and strengthen Social Security and Medicare. |
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Rebuild the Middle Class
Learn how we’re fighting to rebuild the middle class for a stronger America where everyone has a chance to thrive. |
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| Means testing is the wrong approach to Medicare expansion |
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The debate over Medicare expansion has hurled a bad idea back into the public square: means-testing seniors’ health care benefits. This is something seniors’ advocates have long opposed, because it would hurt beneficiaries and undermine support for the Medicare program itself. (October 11, 2021, The Hill, written by NCPSSM President & CEO Max Richtman)
Read More →
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| Opinion: The pernicious Trust Act |
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Like indigestion, a bad idea that would hurt Social Security beneficiaries keeps coming back up. (October 11, 2021, The Washington Post, Letter to the Editor written by NCPSSM President & CEO Max Richtman)
Read More →
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| How COVID Deaths Impact Social Security |
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NCPSSM Director of Government Relations and Policy Dan Adcock explains that a decrease in Social Security revenue during the pandemic was offset by unexpected deaths, meaning less money flowed into the system, but less was paid out. (October 5, 2021, WDUN, Radio Interview with NCPSSM Director of Government Relations and Policy Dan Adcock)
Listen Here →
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