Social Security 2025 COLA expected to be small increase 

Published in RINewsToday on September 16, 2024

Stay tuned… Next year’s cost-of-living adjustment (COLA) will be announced by the Social Security Administration (SSA) in mid-October, upon the release of September’s annual inflation adjustment data.  SSA’s COLA for 2025 will be reflected in beneficiary checks starting in January of that year. Like clockwork, this happens annually, although beneficiaries may see their payments occasionally arrive a few days early due to holidays or weekends. 

The Senior Citizen’s League (TSCL) releases its COLA projections each month. The official COLA is determined by the Labor Bureau’s revised CPI-W data from July, August and September.

Some say SSA’s 2025 COLA is “Chump Change”

With one month left, TSCL’s latest COLA model results, released on Sept. 11, 2024, predicts that next year’s COLA will be 2.5 % based on a decline from 2.9% to 2.5% in consumer price data. While 2.5% is lower than the 3.2% received in 2024, that wouldn’t be far from the historical norm. The COLA has averaged about 2.6% over the past 20 years. It went as low as 0.0% in 2010, 2011, and 2016 and as high as 8.7% in 2023.

According to TSCL, by law, the annual inflation adjustment is based on the average inflation during July, August, and September as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Bureau of Labor Statistics averages the CPI-W for these three months and then compares it with the same timeframe from the previous year, says the Alexandria-based nonprofit advocacy group whose mission is to protect Social Security, Medicare, and veteran or military retiree benefits.  

TSCL’s COLA latest analysis findings indicates that next year’s COLA of 2.5% would raise the average monthly benefit for retired workers of $1,920 by $48 or about $564 annually. The modest increase will not enable seniors to cover increasing cost of living expenses (including food, clothing, transportation, energy, and shelter costs).  “Rising grocery prices is creating food insecurity for many retirees. Feeding America estimated that 5.5 million Americans age 60 and above suffered from food insecurity in 2021, in the most recent study available on the subject, and that number is likely higher today,” note the researchers.

“Due to a higher cost of living, older Americans are using more and more of their income each month just to get by compared to a year ago. “Sixty-five percent of seniors reported monthly expenses of at least $2,000, up from 55% in 2023,” says TSCL’s COLA analysis, noting that statistical testing shows that there’s almost no chance that this gap is due to noisy survey variation. (The 2024 survey had 2,129 respondents; 2023 had 2,258 respondents.)

But low-income seniors aren’t the only ones who have seen their expenses rise, either, say the researchers, noting that more seniors are spending at least $4,000 or $6,000 per month compared to 2023, too, while fewer are able to get by on $1,000 or less. TSCL says that a rise in monthly expenses wouldn’t be much of an issue if seniors’ higher expenses were going to fun activities things, like activities with their grandchildren, or discretionary costs, like bucket-list vacations. However, this is not the case, says the Social Security advocacy group.  “Nearly 80% of senior households in the 2024 survey reported that their monthly budget for essential items like food, housing, and prescription drugs had increased over the last 12 months, with 63% saying they’re worried that their income won’t be enough to cover these basic costs in the coming months,” says the analysis findings.

Over the years, TSCL, along with other aging advocacy groups including the National Committee to Protect Social Security (NCPSSM) and Social Security Works, have called for higher COLAs.

Calls for Congress to change current COLA formula.

Last March, in correspondence to Sen. Bob Casey, Jr. (D-PA), chairman of the U.S. Senate Special Committee on Aging, NCPSSM, the Washington DC based Social Security advocacy group endorsed Casey’s legislative proposal, S. 3974, entitled the “Boosting Benefits and COLAs for Seniors Act.”  The proposal has been referred to the Senate Finance Committee.

Specifically, Casey’s legislative proposal, introduced March 19, 2024, would direct SSA to adjust benefits based on CPI-E rather than CPI-W, if CPI-E would result in a larger increase in benefits. The Bureau of Labor Statistics  (BLS) would calculate and publish the CPI-E on a monthly basis. The Senator believes it would be the most accurate measure of the real effect of inflation on the goods and services that are purchased by America’s seniors.

In NCPSSM’s correspondence, CEO and President Max Richtman strongly supported Casey’s call for requiring BLS to change the way it calculates SSA’s annual COLAs, using a CPI-E formula.

According to Richtman, SSA’s current formula for calculating COLAs is based upon the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which is a measurement by the BLS of the changes in the prices paid for a market basket of goods and services purchased by urban wage earners and clerical workers.

“The current CPI-W has fallen far short of providing needed inflation protection because it fails to adequately measure the spending patterns of seniors,” says Richtman in his endorsement of Seniors typically spend more on out-of-pocket health care costs than other Americans, and in most years, the cost of health care rises more quickly than general inflation,” he says. “We believe adoption of your bill would go a long way toward protecting those on fixed incomes from the ravages of inflation,” says Richtman.

The following organizations have endorsed S. 3974: Arc of the United States; Alliance for Retired Americans; American Federation of Government Employees; American Federation of State, County and Municipal Employees; California Alliance for Retired Americans; Justice in Aging; National Committee to Preserve Social Security and Medicare; National Education Association; National Organization of Social Security Claimants Representatives; Social Security Works; Strengthen Social Security Coalition.

While former President Donald Trump and Vice-President Kamala Harris have both pledged to protect Social Security, nether have put out a specific plan to keep America’s retirement program solvent.

According to the last Social Security Trustees report, the Social Security Old-Age and Survivors Insurance  trust fund is projected to be depleted by 2033 at which point SSA will be forced to make a 21 percent across the board reduction.  The nonpartisan Committee for a Responsible Federal Budget estimates that this would be a $16, 500 cut in annual benefits for a typical dual-income couple retiring at the time of trust fund depletion. 

When the dust settles after the upcoming presidential election, the new president must make it a priority to hammer out a bipartisan fix along with pushing for requiring BLS to use the CPI-E Formula to accurately predict the impact of inflation on America’s retirees. 

Costa takes helm of SACRI, Crafts Vision for Upcoming Conference

Published in RINewsToday on September 9, 2024

The Senior Agenda Coalition of Rhode Island (SACRI), an independent and diverse coalition of over 20 agencies and individual members who advocate for older Rhode Islanders, gears up for the planning of its 16th Annual Conference and Expo with the recent appointment of its new Executive Director, Carol Anne Costa.

Bringing a Wealth of Experience to SACRI

According to Diane Santos, SACRI Board  Chair, Costa brings a wealth of experience from her positions in the Raimondo administration and most recently as the Constituent Service Coordinator for the Rhode Island Office of Attorney General. Her institutional knowledge at the state and federal levels gained in her past positions in the Rhode Island Judiciary, as well as Executive Director of National Utility Contractors of RI (NUCARI) and her managerial role at the Johnston Housing Authority, is a great asset.

“Most importantly, Carol is passionate about helping others, not only through her work but also through her volunteerism in the community. This commitment is exemplified by her serving on many Boards and committees, most notably as a member of the Board of Directors of Wiggin Village for the past 20 years,” says Santos.

The conference will bring together important voices: people from across the state together with the politicians who serve their interests at the levers of power, says Costa. “To achieve progress on any issue the participation of decision makers along with those they represent is the best way to meet budget, legislative and policy goals,” notes Costa.

SACRI Conference is Just a Month Away

In July, Costa stepped into the role of managing SACRI’s upcoming annual conference, “A Bridge to a Secure Future,” to be held on October 9, 2024, from 7:30 a.m. to 12:00 noon, at the Warwick-based Crown Plaza.  This major task remains on her desk as do many of the other tasks to move the organization forward to prepare for the upcoming General Assembly session.

We must embrace the future and respect the past,” says Costa, in developing strategies to advocate for legislative proposals that enhance the lives older persons.

 “My goal is to fill the ballroom at the Crowne Plaza to capacity with older Rhode Islanders, aging advocates, partners and coalition members to educate them about legislative proposals that SACRI supports during next year’s legislative session.

According to Costa, the conference theme, “A Bridge to a Secure Future,” focuses on the kitchen table issues facing older adults and adults with disabilities: economic security, healthcare, and housing. Presenting the keynote address is US Senator Sheldon Whitehouse who will be followed by a panel including US Congressman Seth Magaziner, RI Attorney General Peter F. Neronha and Housing expert, Julie Leddy, she says.

“The conference will be informative and opportune.” said Costa, noting that SACRI’s mission is helping to better the lives of older Rhode Islanders and adults with disabilities and the conference helps us to expand our outreach into the community.

“Empowering people by giving their voice to pertinent issues is something I value, and this conference is the perfect way to begin my tenure at the helm,” she continued.

“In Rhode Island, the healthcare system is under great stress. Older Rhode Islanders face a system rife with worker shortages, long wait times and a dwindling pool of doctors. Solving these problems requires the voices of our coalition and its partners to bring attention to them and the impact they have on people,” said Costa.

In speaking about housing issues, Costa noted, “The housing situation in the state is at a crisis point where new stock is virtually nonexistent and underfunded agencies tasked with building, managing, and easing rental spikes are the only bulwark to help ordinary folks.”

But the big question which looms is will the monies allocated for new development be proportionally distributed, particularly for our older adults as threats to Medicare and Social Security at the federal level compound the stress they feel?” asks Costa.

“This advocacy work is in my DNA, and I am enjoying every minute of it,” says Costa, stressing that she looks forward to moving SACRI forward to accomplish its legislative and policy goals that will impact Rhode Island’s older population.

“And I would be remiss if I did not ask everyone to join us on October 9, 2024,” she said.

Building on Last Year’s  Success

Looking back, over 300 people attended last year’s conference, says Maureen Maigret, SACRI’s Policy Advisor, who assisted its Board members to organize the 2023 conference.  After educating the attendees, the coalition mobilized its troops composed of older Rhode Islander, aging and health care organizations, educators, unions, and Medicare insurance providers to push for change. “

How did that conference impact SACRI’s lobbying efforts?

“Last year’s legislative agenda reflected policy issues discussed by the keynote speaker and panelists at the conference,” noted Maigret, a former Director of the State’s Office on Aging.   According to Maigret, SACRI’s lobbying efforts resulted in the General Assembly enacting SACRI’s legislative priorities that included increasing home and community service provider rates, increasing funding for the state’s senior centers and the streamlining of zoning requirements for the building of Accessory Dwelling Units.  Lawmakers also put a $120 million housing bond program on the November ballot, she said.

“Feedback from Conference attendees about the presentations was excellent and they liked the variety of exhibitors, too,” says Maigret, noting that some participants did say they would have liked more time to ask questions to the presenters. This year’s conference does build in additional time for Q&A, she adds. 

Maigret says SACRI’s Board took charge in organizing the successful event.  This year, Costa and her Board continue its efforts to organize and prepare for the upcoming legislative session, she says.

The cost of SACRI’s upcoming conference is $25.00 per person for Members and $35 per person for nonmembers.  And any organization who wishes to exhibit their work at the Expo, the tables are $350.00. To register go to  https://senioragendari.org/2024-conference-and-expo.

For more details about SACRI, to https://senioragendari.org/.

Cap on out— of-pocket costs for Medicare drug plan enrollees coming soon

Published in RINewsToday on September 2, 2024 

Back on Aug. 16th in 2022, President Joe Biden signed into law the Inflation Reduction Act of 2022 (IRA), it’s enactment lowering the health cost for millions of older Americans by lowering the high cost of prescription drugs by granting Medicare the power to directly negotiate drug prices with drug companies.  Rising drug costs were forcing some Medicare beneficiaries to cut their expenses by not filling a prescription or even skipping doses. This could lead to complications and side effects resulting in hospitalization, even death.

“AARP was instrumental in Congress passing the prescription drug law of 2022 to lower prices and out-of-pocket costs for Medicare enrollees,” said Jo Ann Jenkins, CEO of AARP in an Aug. 28 statement announcing the release of AARP’s new report. “As we approach January 2025, we want every senior in America to know that, thanks to the new annual cap which limits their out-of-pocket costs, they will have more money to invest in their families, spend on their broader health needs or simply save to achieve greater financial stability.”

Virtual Media Briefing Details Impact on IRA law

Last week, the Washington, DC-based AARP briefed the media on the state-level impact of the historic new federal protection for 56 million Medicare drug plan enrollees. The new law caps out-of-pocket prescription drug costs every year, beginning at $2,000 in January 2025. 

The nine-page Public Policy Institute report, released at the virtual media briefing, analyzes the number of enrollees (not receiving the Medicare low-income subsidy) that will benefit from the new cap by state, age, gender, and race between 2025 and 2029.

Nancy LeaMond, the chief advocacy and engagement officer for AARP, say putting the brakes to spiraling drug cost by enacting the IRA put money back into the pockets of millions of America’s retirees purchasing pharmaceuticals for their medical conditions. “Upwards of 95% of Americans, age 65 and older, have at least one chronic condition and close to 80% are dealing with 2 or more chronic conditions,” says LeaMond, like diabetes and heart disease, to debilitating neurological diseases like Parkinson’s and Ms.

“Prescription drugs are a lifeline, said LeaMond, stressing that medicine is only effective if you have the money to pay for it. The passage of IRA two years ago is already having a significant and positive impact on millions of Medicare beneficiaries who now don’t pay more than $35 a month for insulin and get free vaccines for things like shingles,” she noted. 

“There are even bigger savings coming down the pike, starting in January 2025. The total amount that folks enrolled in Medicare drug plans pay out of pocket for their prescriptions will be capped at $2,000 a year,” reports LeaMond.  

During the media briefing, Leigh Purvis, Prescription Drug Policy Principal, AARP Public Policy Institute, stated “one of the biggest challenges in the original Medicare Part D benefit was the lack of a cap on out-of-pocket spending.”  Even after reaching a certain limit, Medicare beneficiaries were still required to pay 5% of their drug costs, with no limit for those on expensive Medications, she said.

According to Purvis, out of pocket expenses could exceed $10,000 per year, “an unmanageable amount for anyone, but especially for a population with a Median annual income of $36,000. Because of this, AARP pushed for the inclusion of a cap on out-of-pocket spending for Medicare Part D, to be included in the IRA, she said.  And it was…

Purvis noted that 3 million Part D beneficiaries (who don’t receive the Medicare Part D low-income subsidy are expected to benefit from the $2,000 cap in 2025.  This number is expected to grow to over 4 million by 2029.  These Medicare drug plan enrollees would see average savings of roughly $1,100, or 56%, in 2025 for their prescription drugs. 

Purvis also gave a few other takeaways from the report.  On average,  approximately 1.4 million (40 percent) Medicare drug plan enrollees who reach the new out-of-pocket cap between 2025 and 2029 are estimated to see annual savings of $1,000 or more, and just over 420,000 (12 percent) will see savings of more than $3,000.  In addition, more than three-quarters of Medicare drug plan enrollees who will benefit in 2025 are between the ages of 65 and 84.

Finally, Paula Cunningham, AARP Michigan State Director (discussing  results of a state survey) and Diana Devito , who has lived with chronic lymphocytic leukemia for over 19 years, participated in the media briefing. Both reinforced  how the report’s numbers aren’t just statistics, they represent real people “who are being forced to make impossible choices.” 

Cunningham told a “heartbreak” story about a woman who had lost her husband, and she had to sell her wedding ring in order to pay for her prescription drugs. “She’s now deceased, but I will never forget her story, or the stories of people across this great state that we met who had to make difficult choices between paying rent or buying groceries to pay for their medications,” she said.

After experiencing the high prescription costs for treating life-threatening chronic disorder, Devito came to share how important a $2,000 cap can be “for people like me.”  She said, “It’s a real-life changer,” noting that everyone doesn’t understand that. “If you’re not taking one of these expensive drugs, you don’t realize the impact that it has on your life,” she added.

On Another Note…

U.S. Senator Jack Reed brings to my attention another Congressional report that details the Rhode Island specific data as to the impact of IRA on older Rhode Islanders.

According to the Congressional Joint Economic Committee (CJEC), this year, about 57,000 Rhode Island Medicare beneficiaries will save an average of roughly $200 each year because of IRA’s improvement to the Medicare Part D drug coverage. By 2025 this number would increase to 68,000 retirees, saving them an annual average of $340 on prescription drugs.

By allowing Medicare to negotiate with drug companies to bargain down the high cost of many lifesaving drugs, 29,000 retirees use drugs that are with the new negotiated prices, says the CJEC report.

For a copy of AARP Public Policy Institute’s Medicare Part D Out-of-Pocket Spending Cap, go to https://www.aarp.org/pri/topics/health/prescription-drugs/medicare-part-d-out-of-pocket-spending-cap-prescription-drug-costs/.

To learn more about AARP’s work to lower prescription drug prices, visit https://www.aarp.org/politics-society/advocacy/prescription-drugs/.

For a copy of CJEC’s report, go to https://www.jec.senate.gov/public/_cache/files/356ae3d2-af5e-4d32-bd42-fafc548173c5/ri-cost-savings-fact-sheet.pdf

For details how the IRA impacts older Rhode Island retirees, go to https://www.whitehouse.gov/wp-content/uploads/2022/08/Rhode-Island-Health-Care.pdf