Tag Archives for cost of living adjustment

Seniors Can Expect Small Increase in Their 2020 Social Security COLA

Published in the Woonsocket Call on Oct. 27, 2019

The Social Security Administration (SSA) announces Oct. 10 that Social Security and Supplemental Security Income (SSI) benefits for nearly 69 million Americans will increase 1.6 percent in 2020 (Some recipients receive both Social Security and SSI benefits).

Social Security and SSI recipients will be notified about their new benefit amount by mail in early December. This COLA notice can also be viewed online through their my Social Security account. People may create or access their my Social Security account online at http://www.socialsecurity.gov/myaccount.

According to SSA, the 1.6 percent COLA increase will begin with benefits payable to more than 63 million Social Security beneficiaries in January 2020. Increased payments to more than 8 million SSI beneficiaries will begin December 31, 2019. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as calculated by the Department of Labor’s Bureau of Labor Statistics.

The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase from $132,900 to $137,700, says SSA.

The earnings limit for workers who are younger than “full” retirement age (age 66 for people born in 1943 through 1954) will increase to $18,240. SSA will deduct $1 from benefits for each $2 earned over $18,240.

The earnings limit for people turning age 66 in 2020 will increase to $48,600. SSA will deduct $1 from benefits for each $3 earned over $48,600 until the month the worker turns age 66.)

There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

COLA Not Keeping Up with Rising Cost of Living

Over the years, Social Security’s COLA has not provided financial protection against rising costs, charge aging advocacy groups.

Social Security checks in 2019 are as much as 18 percent lower due to the impact of extremely low COLAs over the past 10 years, says an analysis recently released by the Arlington, Virginia-based The Senior Citizens League (TSCL). TSCL’s Social Security policy analyst, Mary Johnson authored this analysis.

Johnson’s analysis noted that from 2000 to 2010, COLAs routinely averaged 3 percent
annually. People who have been receiving Social Security checks since 2019, have only seen a COLA higher than 2,8 percent one time (in 2012), she said, noting that Social Security benefits have lost 33 percent of buying power since 2000.

Johnson’s findings reported that in 2010, 2011, and 2016 there was no COLA payable at all and, in 2017, the COLA was just 0.03 percent. However, in 2018, the COLA was 2 percent, but rising Part B premiums consumed the entire increase for roughly half of all beneficiaries.

Calls for Strengthening the COLA

According to the National Committee to Preserve Social Security and Medicare (NCPSSM), the upcoming COLA change will give a whopping $24 per month increase for the average beneficiary. With Medicare Part B premiums expected to rise around $8 next year, the net cost-of-living adjustment for most seniors will be only $16 per month. The new COLA brings the average monthly retirement benefit up to $1,503 — it’s just a $288 yearly raise for seniors living on fixed incomes.

NCPSSM notes that roughly half of America’s seniors rely on Social Security for at least 50 percent of their income, and 1 in 4 depending on the program for at least 90 percent of their income, the 2020 COLA increase does not go very far in helping these recipients pay their bills. A $16 per month probably won’t cover typical expenses, such as the cost of a single prescription copay, a month’s medical supplies, or transportation to a doctor’s appointment, adds the Washington, DC- advocacy group whose goal is to protect Social Security and Medicare.

“It’s ironic that as billionaires and big corporations continue to profit from the $1.5 trillion in Trump/GOP tax cuts, America’s seniors are to get by with a meager $24 monthly raise,” says Max Richtman in a statement after SSA announced the 2020 COLA increase. NCPSSM’s President and CEO. “The negligible 2020 COLA illustrates why seniors need a more accurate formula for calculating the impact of inflation on their Social Security benefits. For years, we have urged the government to adopt the CPI-E (Consumer Price Index for the Elderly), which reflects the spending priorities of seniors, including health care, as opposed to the current formula based on younger urban wage earners’ expenses,” says Richtman.

If the CPI-E were adopted, beneficiaries would see a 6 percent overall increase in benefits over 20 years compared to the current formula used, which yielded a zero cost-of-living adjustment three times during the past decade — and a mere 0.3 percent in 2017, says Richtman, noting that health care costs have increased about 6 percent in 2019 alone.

“The prices of the most commonly prescribed drugs for seniors on Medicare rose ten times the rate of inflation from 2013-2018. The cost of senior living facilities is growing at 3 percent annually – which adds up quickly over time,” adds Richtman.

Adds Webster Phillips, NCPSSM’s Senior Legislative Representative, “COLAs are out of sync with seniors’ actual expenses. Retirees have been living on very tight cost-of-living adjustments for a number of years now, which forces them to make hard decisions about their monthly budgets.”

In a statement, AARP chief executive officer Jo Ann Jenkins said, “Social Security’s annual COLA amount typically does not keep pace with all the increases in living expenses that most seniors face, including the costs of housing, food, transportation and, especially, health care and prescription drugs. AARP’s recent Rx Price Watch report found that retail drug prices increased by twice the rate of inflation during 2017, and have exceeded the inflation rate for at least 12 consecutive years,” she says.

“AARP will continue our advocacy for bipartisan solutions to help ensure the long-term solvency of the Social Security program, as well as adequate benefits for recipients. We will also continue to fight for lower health care and prescription drug costs, which are eating up a growing share of Social Security benefits,” adds Jenkins.

TSCL’s Mary Johnson says that her group calls on Congress to require a minimum COLA of no less than 3 percent every year, even in years when inflation falls below that amount. “Strengthening the COLA,” she says, “would help slow the drain of retirement savings and help keep older Americans out of poverty.”

For information about Social Security benefits and claiming strategies, those approaching retirement age may visit AARP’s Social Security Resource Center, at https://www.aarp.org/retirement/social-security/.

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.