Multimedia File Viewing and Clickable Links are available for Registered Members only!!  You need to or

Millions face shrinking Social Security payments


WASHINGTON - Millions of older people face shrinking 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 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."

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 to 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.

While the payments are not legally able to be decreased, and so no actual change will be seen in the amount, the high cost of health care, especially for seniors, is expected to wipe out a great deal of each payment, making it harder for seniors to live on their meager wages.

“For many elderly, they don’t feel that inflation is low because their expenses are still going up. Anyone who has savings and investments has seen some serious losses,” AARP official, David Certner, was quoted by Taragana.

The major problem is drug premiums, which have no legal limitation of premium increases. While other medical costs have a cap stating no increase can be greater than what is increased in the payment itself, drug premiums can, and will, rise drastically.

This poses a serious problem for millions of seniors and veterans who are on Medicaid, who have premiums immediately deducted from their Social Security checks.

In my town, we have a local SS geek from a Lutheran Social Serivces office. She writes a column on Medicare and also answers questions.  She helped when I got down to disabiltiy and extra Medicare drug coverage. You must have someone in your area that will help. Look around now, not later.

Charlie

You know, they should forget the politics of the thing or trying to scare us by saying that for some reason north of the border, drugs become deadly to Americans. There should be no restrictions nor should we be discouraged from seeking ways to afford to stay alive.

You're right. For God's sake be really conservative and leave us alone. Drug companies aren't going to go broke if a bunch of gray-hairs ride a bus to Ontario and pick up Lipator or somesuch, they'll do just fine.

Geeze.

Charlie