Social Security Benefits Decrease in 2011
Feb 4th, 2011 | By Sharon Shaw Elrod MSW EdD | Category: Social Security & MedicareFor the second year in a row, senior citizens receiving Social Security benefits do not get the annual cost-of-living adjustment. And rising Medicare premiums are projected to shrink Social Security benefits for 25 millions of us seniors. This is not good news for us, and we need to think about mobilizing our resources to let members of congress know how we feel and what we think.
The Senior Citizens League (TSCL) is a nonpartisan senior organization and one of the largest in the nation. It’s Chairman recently said, “If that isn’t bad enough, when rising cost-sharing and coverage changes are added, some of the oldest and sickest seniors may find they need as much as half of their Social Security benefits just to cover healthcare costs in 2011,” says TSCL Chairman, Larry Hyland. “Seniors have to pay more, but they have less to do it with,” Hyland says. “And this could become our new norm in the near future,” he notes.
Most notable of the changes for some seniors include new increases in Part D (prescription drug coverage) and Medicare Advantage (the private plans) plan premiums. We will be paying more out of pocket, more drugs are not covered in Part D, and we will lose some extra benefits.
TSCL is supportiong legislation that protects us senior citizens from economic ups and downs with a guaranteed average cost of living adjustment of 3%; the organization also opposes proposals that increase Medicare costs. Some recent proposals by federally elected officials would monkey around with the cost of living adjustment and Medicare. TSCL reports, “When there’s no COLA as was the case in 2010 and will be in 2011, seniors lose the compounding effect of the increase, which in most years averages about 3%. Although relatively small, the COLA grows like interest over time. The loss of two years of an average COLA and low inflation forecast for 2012 would have a similar effect, but in reverse – costing retirees with average benefits as much as $40,000 over a 25-year retirement.”
SCJ again urges readers to contact your senators and representatives with the message to support the cost of living adjustment for seniors, and stop any attempts to cripple Medicare. TSCL is also conducting an online survey to learn more about how the lack of COLA and rising costs are affecting seniors. To learn more and to participate in the survey, visit the TSCL website at www.SeniorsLeague.org or call 1-800-333-8725 for information.
__________________________________________
Back in 2009.... http://www.cbsnews.com/stories/2009/08/23/national/main5260253.shtml
Social Security Checks Shrink for Millions
No Cost of Living Adjustment for Next 2 Years, Trustees Say; First Time in Generation Payments Would Decrease
(AP / CBS)
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 in 1975.
By law, Social Security benefits cannot go down. Nevertheless, 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 go up slightly.
"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.
"For many elderly, they don't feel that inflation is low because their expenses are still going up," said David Certner, legislative policy director for AARP. "Anyone who has savings and investments has seen some serious losses."
About 50 million retired and disabled Americans receive Social Security benefits. The average monthly benefit for retirees is $1,153 this year. All beneficiaries received a 5.8 percent increase in January, the largest since 1982.
More than 32 million people are in the Medicare prescription drug program. Average monthly premiums are set to go from $28 this year to $30 next year, though they vary by plan. About 6 million people in the program have premiums deducted from their monthly Social Security payments, according to the Social Security Administration.
Millions of people with Medicare Part B coverage for doctors' visits also have their premiums deducted from Social Security payments. Part B premiums are expected to rise as well. But under the law, the increase cannot be larger than the increase in Social Security benefits for most recipients.
There is no such hold-harmless provision for drug premiums.
Kennelly's group wants Congress to increase Social Security benefits next year, even though the formula doesn't call for it. She would like to see either a 1 percent increase in monthly payments or a one-time payment of $150.
The cost of a one-time payment, a little less than $8 billion, could be covered by increasing the amount of income subjected to Social Security taxes, Kennelly said. Workers only pay Social Security taxes on the first $106,800 of income, a limit that rises each year with the average national wage.
But the limit only increases if monthly benefits increase.
Critics argue that Social Security recipients shouldn't get an increase when inflation is negative. They note that recipients got a big increase in January - after energy prices had started to fall. They also note that Social Security recipients received one-time $250 payments in the spring as part of the government's economic stimulus package.
"Seniors may perceive that they are being hurt because there is no COLA, but they are in fact not getting hurt," said Andrew G. Biggs, a resident scholar at the American Enterprise Institute, a Washington think tank. "Congress has to be able to tell people they are not getting everything they want."
Social Security is also facing long-term financial problems. The retirement program is projected to start paying out more money than it receives in 2016. Without changes, the retirement fund will be depleted in 2037, according to the Social Security trustees' annual report this year.
President Barack Obama has said he would like tackle Social Security next year, after Congress finishes work on health care, climate change and new financial regulations.
Lawmakers are preoccupied by health care, making it difficult to address other tough issues. Advocates for older people hope their efforts will get a boost in October, when the Social Security Administration officially announces that there will not be an increase in benefits next year.
"I think a lot of seniors do not know what's coming down the pike, and I believe that when they hear that, they're going to be upset," said Sen. Bernie Sanders, an independent from Vermont who is working on a proposal for one-time payments for Social Security recipients.
"It is my view that seniors are going to need help this year, and it would not be acceptable for Congress to simply turn its back," he said.
_______________________________________________________________________________________
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.