Tag Archives for COLA

Time to Change how Social Security Calculates ‘COLA’

Published in Woonsocket Call on October 23, 2016

On Tuesday, September 18, the U.S. Social Security Administration announced that the nation’s 65 million Social Security beneficiaries will be automatically be paid a minuscule 0.3 percent cost-of-living adjustment (COLA) to their monthly checks in 2017. The average monthly Social Security benefit next year will be $1,360, $5 more than now.

According to AARP, 153,349 Rhode Islanders received Social Security checks as of the end of 2014. Also, 22 percent of Rhode Island retirees depend on their Social Security check for 90 percent or more of their income. That’s chump change, not a lot of money for Rhode Island retirees to buy groceries, gas, or even catch up on their bills.

The federal agency detailed other changes that we can expect, too. Beginning in 2017, the amount of your earnings subject to the Social Security tax increases from $118,500 to $127,200. It’s estimated that this tax change impacts about 12 million of the 173 million people who pay into the retirement system.

Next year’s Social Security COLA increase is the smallest in a decade and comes after no increase in 2016 (zero increases also occurred in 2010 and 2011). Seventy percent of Medicare beneficiaries are protected by a hold-harmless rule, which keeps Social Security benefit payments from decreasing because of increased Medicare Part B premiums. However, 30 percent of Medicare beneficiaries (including high wage earners, those enrolled in Medicare and not yet receiving Social Security, and newly enrolled in Medicare) could see cost increases in their Medicare Part B premiums that cover their visits to doctors and hospitals. The increased premium costs will be deducted directly from their Social Security check.

Chump Change COLA Won’t Pay Bills

Responding to the federal government’s disappointing COLA announcement, AARP CEO Jo Ann Jenkins, whose Washington, DC aging group represents 37 million members, charges in a statement that one major domestic issue ignored by presidential debate moderators and one that demands attention from candidates is the future of Social Security.

“Over the last five years, Social Security COLA’s have remained small or nonexistent at 1,7 percent or lower, even though every cent can matter to beneficiaries and their families. After last year’s zero COLA, this year’s announcement doesn’t offer much help to the millions of families who depend on their Social Security benefits. As prescription prices skyrocket and Medicare premiums and other health costs increase, many older Americans have understandable concerns. Along with many groups, AARP has also asked Congress to ensure that Medicare premiums and deductibles don’t skyrocket next year,” says Jenkins.

Adds Max Richtman, President/CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM), “No one can say with a straight face that providing the average senior with an additional four dollars a month will come even close to covering the true cost of living that retirees face. The average senior spends more than $5,000 a year on healthcare costs alone. A $4 Social Security COLA doesn’t even make a dent in covering rising costs for seniors.”

Richtman asserts that next year’s tiny COLA increase only continues the trend of historically low cost-of-living adjustments for retirees. “Over the past eight years, the current COLA formula has led to average increases of just over 1%, with three of those years seeing no increase at all. For the average senior, the 2017 COLA will mean an extra $4.00 per month which would barely cover the average cost of one Lipitor pill, a prescription drug frequently prescribed to seniors,” he says.

Richtman notes, “I’ve asked seniors at town hall meetings around the country how many of them think the COLA represents their true cost of living — laughter is always the response. We should move to a COLA formula that takes a more accurate measure of seniors’ expenses, which is a CPI for the elderly. The CPI-E has been in the experimental phase since 1982. It’s time to finish the job by fully funding the development of a more accurate COLA formula.”

Congress Must Legislatively Fix COLA Formula

In media releases, Rhode Island lawmakers call for tweaking how Social Security calculates Social Security COLAs.

Democratic U.S. Senator Sheldon Whitehouse, who sits on the U.S. Senate Special Committee on Aging, calls next year’s Social Security COLA increase an “insult.” He says, “For the fifth year in a row, Washington’s outdated formula has resulted in zero or next to zero cost of living adjustment for Social Security benefits. For the fifth year in a row, Rhode Island seniors will have to stretch their budgets to cover the rising cost of the basics, like food, housing, bills, and prescriptions. They didn’t bargain for this when they paid into Social Security over a lifetime of hard work. Congress needs to change the way we calculate Social Security COLAs.”

Adds, Rep. David Cicilline (D-RI), “This is completely unacceptable. The method for calculating cost of living adjustments is completely broken and fails to reflect the costs of gods and services seniors buy in Rhode Island and across the country.”
The Rhode Island Congressman calls for the Republican House Leadership to seriously consider pending legislation that will ensure that cost of living adjustments reflect the goods and services Rhode Island seniors actually buy. “Speaker Ryan should immediately bring the Protecting and Preserving Social Security Act to the floor so we can replace this outdated method for calculating cost of living adjustments with a model that actually meets the needs of Rhode Island seniors,” said Cicilline.

During the last Congress, the Senate and House controlled GOP have consistently kept legislative proposals from being considered that were crafted to bring needed reforms to the nation’s Social Security and Medicare programs. A newly elected Democratic President and a Congress controlled by Democrats might just be the political fix necessary to finally do the job that is ensuring the financial long-term solvency of these two domestic entitlement programs

How the Election Impacts Social Security

Published in Woonsocket Call on July 24, 2016

On the final night of the Republican National Convention (RNC) an average of 32 million Americans tuned in to watch Donald J. Trump, a New York Real Estate Developer, author, television personality and now politician, formally accepted the GOP nomination for President of the United States.

After he delivered his July 21 speech, reporters, political commentators, and even postings trending on twitter called Trump’s hour and 15 minute speech (4,400 words) “dark” because of its stark tone and content. This GOP presidential candidate’s speech was even referred to as being the longest acceptance speech in history since 1972.

Before more than 2,400 delegates Trump, 70, pledged to be the nation’s law and order president who would crack down on crime and violence. America first would be Trump’s mantra during the negotiation of international trade deals and the existing NAFTA trade accord would be renegotiated.

Trump also called for defending the nation’s borders against illegal immigrants and giving parents more choice in choosing schools for their children. And to the forgotten men and woman across the country who were laid-off because of President Obama’s mishandling of the economy Trump promised to be their voice. Syrian refugees would be vetted and only those individuals who “will support our values and love our people” will be admitted, he said.

Trump Ignores Social Security in Speech

Aging advocates say that Trump’s acceptance speech was short on details when it can to domestic policy, specifically Social Security and Medicare. But, you won’t need tea leaves to read how a future Trump Administration will change the way the nation supports its retirees. .

According to Max Richtman, President and CEO of the National Committee to Preserve Social Security and Medicare (NCPSSM), the choice of Governor Mike Pence as Trump’s running mate should send “a very clear message to America’s seniors that their priorities will hold little weight in a Trump administration.” While Trump has promised on the campaign trail that he won’t cut Social Security and Medicare.

During his 12 years serving as a U.S. Congressman, Pence consistently voted in favor of GOP legislative efforts to cut benefits in Social Security, Medicare and Medicaid, says Richtman, charging that Trump’s vice presidential running mate is one of a few Congressional lawmakers that has a strong “anti-seniors voting record.”

Richtman says that “Mike Pence was one of Congress’ biggest proponents of privatization. He supports cutting Social Security benefits by raising the retirement age, reducing the COLA, means-testing and turning Medicare into “CouponCare.” As he told CNN, ‘I’m an all of the above guy. I think we need to look at everything that’s on the menu,’ and the record shows he has done just that by supporting every form of Social Security, Medicare and Medicaid benefit cut proposed in the past decade.”

While Trump has promised not to cut Social Security benefits on his year-long campaign trail, he continues to surround himself with advisors who are “polar opposite” of his positions says Richtman. “They say actions speak louder than words — Donald Trump’s choice of Mike Pence as his Vice-Presidential running mate will speak volumes to American seniors,” he adds.

Political Experts Weigh in

Darrell M. West, Ph.D., Vice President and Director of Governance Studies at the Brookings Institution, says that “Trump is on record as saying he does not want to cut Social Security so that is considerably different from most Republican leaders, who support benefit reductions as a way to balance its books. This probably is the reason the [GOP] platform is vague on Social Security. The party could not reconcile Trump’s view on not cutting benefits with the party’s general view that cuts are needed. That left them with a reference to market solutions without explaining what that meant.”

“Party leaders have said they want to raise the retirement age for people under age 50. That issue certainly would be on the issue in a Trump presidency although it is not clear how he views that issue. But there would be significant support in a GOP-run Congress for doing that and cutting the benefits of future retirees,” adds West.

West believes that “Democrats have a very good chance of recapturing control of the Senate. If that happens, that will allow them to block benefit reductions or raising the retirement age, he says.

Wendy Schiller, professor and chair, Department of Political Science at Brown University, warns that talking about changing Social Security can be risky and this “involves a depth of knowledge about entitlement financing that eludes most political candidates especially those without any political experience.”

The Brown professor of politics does not see Trump tackling this issue in any meaningful way in the campaign and she does not believe it will be a priority for him or the GOP if he wins. “Recall George W. Bush tried to reform Social Security immediately after he won reelection in 2004 – by late January 2005 it was dead on arrival in Congress,” she says.

“Overall I am not sure the GOP leadership in the Congress has fully processed what a Trump presidency would look like in terms of policy or what his priorities might be. It is unclear to me that they will align closely and getting anything through Congress these days is nearly impossible, no matter who sits in the Oval Office,” she adds.

Stark Differences in Platforms to Fix Social Security

On Friday, the released Democratic Platform released reveal a stark difference as how to the Democratic and Republican parties will fix the ailing Social Security program. The GOP platform. Although current retirees and those close to retirement will receive their benefits, changes are looming with a Trump administration and a Republican-controlled Congress. For younger generations all benefit cut options to be put on the table, opposing the lifting of the payroll tax cap and sees privatization of Social Security as a way for older American’s to create wealth for use in retirement. On the other hand, the Democratic Party platform calls for a strengthening and expansion of the existing Social Security program. The Democrats oppose any attempts to “cut, privatize or weaken” Social Security, and calls for lifting the payroll tax and exploring a new COLA formula.

NCPSSM’s Richtman notes “ It’s also very telling that while the GOP buried their cuts and privatization plans for Social Security under the Platform’s Government Reform heading, the Democrats addressed Social Security, as they should, as part of their plan to restore economic security for average Americans. That’s been Social Security’s fundamental role for more than 80 years — providing an economic lifeline impacting the lives of virtually every American family.”

As AARP’s John Hishta noted in his July 22 blog, even though the “political spotlight was not on Social Security” at the RNC in Cleveland, delegates, rank-and-file politicians and even political operatives that he talked with clearly understand the programs importance to retirees and younger generations.

“If political leaders fail to act, future retirees could lose up to $10,000 a year. All beneficiaries could face a nearly 25 percent cut in their benefit,” warns Hishta. .

Hishta tells his blog readers that “AARP’s Take a Stand campaign left the RNC with renewed determination to make updating Social Security a bigger part of the presidential debate.” He pledges to continue pushing for strengthening and expanding the nation’s Social Security program at next week’s Democratic National Convention in Philadelphia and until the November presidential elections.

To keep informed about Social Security discussion during this presidential campaign go to http://takeastand.aarp.org/,

Governor’s Budget is Silent Regarding Many Senior Issues

Published in Pawtucket Times on March 24, 2003

Many of Gov. Don Carcieri’s policy initiatives can be found sprinkled throughout Fiscal Year 2004 Budget address.

While Carcieri’s 3,200-word speech identified his administration’s priorities – that is, maintaining human services, investing in education and creating jobs and fixing the state’s crumbling roads and bridges- it was silent on issues of interest to aging advocates and seniors.

At an AARP debate of gubernatorial candidates, Carcieri was asked if he would budget $15 million to overhaul the existing Medicaid payment system. The additional funding would greatly improve the quality of care and services provided to 10,000-plus nursing home residents.

With this additional $ 15 million in state funding, the federal government would pick up another $ 15 million, for a total increase of $ 30 million.

At the debate, Carcieri acknowledged it would be difficult to find $15 million to fix the system because of the state’s looming budget deficit.

After a first read, Alfred Santos, executive director of the Rhode Island Health Care Association, found the recently released administration budget did not allocate the $ 15 million in new funding to allow nursing facilities to be reimbursed for the actual cost of care that they provide to frail residents.

Santos hopes to schedule a meeting with Gov. Carcieri and his policy staff to discuss Medicaid reimbursement and staffing issues.

“One of the biggest disappointments for seniors in the governor’s budget is his failure to include funding to allow more low-income persons to choose Medicaid waiver-funded assisted living,” noted Maureen Maigret, who serves as Lt. Governor Fogarty’s director of policy and executive director of the state’s Long-Term Care Coordinating Council.

“This has been a priority for the senior advocacy community, and the governor was supportive of this funding during his campaign,” says Maigret.

Maigret told All About Seniors that more than a year ago, the federal government had approved an additional 180 units in the state’s Medicaid assisted living waiver to respond to Rhode Islander consumer demands.

“Failure to fund these units is short-signed in terms of saving taxpayer dollars and denies low-income seniors the option to choose a less restrictive care setting,” said Maigret, who calls the state’s current assisted living waiver program a great success.

According to Maigret, in the last fiscal year, there was a decrease in state-funded nursing home use of about 50,000 days and an increase in Medicaid funded Assisted Living of about the same number of days. “We have reached the funding cap for these Medicaid-funded assisted-living units and have a waiting list of 35 persons,” she said, noting that some of these persons will now be forced to enter nursing facilities at twice the cost of the state.

Meanwhile, Maigret added that the governor’s budget does not address the dire need of more regulatory staff in the Health Department to monitor assisted living and enforce state standards.

On the other hand, the Rhode Island Pharmaceutical Assistance for the Elderly Program (RIPAE) is intact, Maigret said.

“With the costs of prescription drugs increasing at such alarming rates, RIPAE is a vital safety net for thousands of Rhode Island seniors.

Maigret noted that changes this year in Blue Chip and United Health senior plans may further impact many seniors’ accesses to prescription drugs, as these plans have new features which limit benefits for brand name drugs. Legislation proposed by Fogarty and introduced by Sen. Elizabeth Roberts and Rep. Peter Ginaitt will address this pharmaceutical issue, she said.

Finally, Maigret said senior advocates must watch other areas of the state budget that will ultimately impact seniors. Some community grants, such as those that support senior centers, are targeted for 10 percent cuts. While nursing homes are in line for an annual cost of living increase (COLA) in their Medicaid rates, no similar COLA is included for home and community care providers.

Maigret added the governor’s budget cuts about $ 10 million (state and federal funds) to continue its efforts of downsizing the Eleanor Slater Hospital Cranston campus, with a proposal to close two more wards. To offset these closures, the budget includes about $ 800,000 to fund about 20 more nursing home placements and new funds to increase capacity to serve persons with mental illness in community residential settings.

The push to get residents back into the community concerns Roberta Hawkins, state ombudsman and executive director of the Alliance for Better Long-Term Care. She opposes the closure of wards because there are persons in the community who require a higher level of care, a level that is only available at the Eleanor Slater Hospital.

Hawkins noted the administration budget does not include Medicaid funding to pay for dental services to seniors in the community and those residing in nursing facilities.

“The short-sidedness of this fiscal policy ultimately will increase care costs when the resident must be hospitalized for malnutrition, dehydration and bed sores, all caused by dental problems,” Hawkins said. “On a human level, who would want to constantly suffer from pain all night because of a toothache or gum problems?” she added.

Sandy Centazao, president and CEO of Meals on Wheels of Rhode Island, is still waiting to see if Carcieri will ultimately institutionalize her nonprofit group’s funding rather than continue to allocate it as a legislative grant. She expects this decision to be made before the enactment of the state’s FY 2004 budget on July 1.

With a looming recession and a nation at war, Carcieri and the General Assembly must ultimately make difficult decisions as to how to slice the state’s FY 2004 budget. The state’s final budget must  provide the funding and adequate resources to enable long-term care providers to take care of the state’s burgeoning older population. It’s the right thing to do, even n times of uncertainly.