Modest Social Security COLA increase seen as chump change by some

Published in RINewsToday on October 16, 2023

Last week, the Social Security Administration (SSA) announced that Social Security and Supplemental Security Income (SSI) benefits for more than 71 million beneficiaries will increase 3.2% in 2024, about $59 per month starting in January. The 2024 payment declined from last year’s 8.7%, but that had been the highest in four decades. And, its higher than the average 2.6% increase recorded over the past 20 years.

The Social Security Act determined how the cost-of-living adjustment (COLA) is calculated. Enacted on August 14, 1935, the Act ties the annual COLA to the increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) as determined by the Department of Labor’s Bureau of Labor Statistics.

More than 66 million Social Security beneficiaries will see that COLA increase 3.2% beginning in January 2024, and increased payments to approximately 7.5 million people receiving SSI will begin on December 29, 2023. (Note: some people receive both Social Security and SSI benefits).

“Social Security and SSI benefits will increase in 2024, and this will help millions of people keep up with expenses,” observes Kilolo Kijakazi, Acting Commissioner of Social Security in an Oct. 12 statement announcing this year’s COLA increase.

According to SSA, some other adjustments that will also take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $168,600 from $160,200.

Advocacy groups on aging talk turkey about COLA

“The annual COLA is a reminder of Social Security’s unique importance. Unlike private-sector pension plans, whose benefits erode over time, Social Security is designed to keep up with rising prices, noted Nancy Altman, President of the Washington, DC-based Social Security Works (SSW), in response to SSA’s COLA announcement.

“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” said Jo Ann Jenkins, AARP chief executive. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important,” she added, stressing that Social Security has been the foundation for financial security for hundreds of millions of retirees. “SSA’s COLA announcement shows that it’s continuing to deliver on this promise,” she says.

However, Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare charges, “While we are grateful that Social Security is the only major retirement program with a built-in cost-of-living adjustment, the current formula for determining COLAs is inherently flawed. SSA’s current COLA formula doesn’t truly reflect the increase in prices for the goods and services that beneficiaries rely on.”

According to Richtman, the 3.2% 2024 COLA only represents a modest $59 increase in the average monthly benefit for retired workers, and that’s before deducting the projected increase in the 2024 Medicare Part B premium of about $10 per month. Because of this the average retirement beneficiary will receive a net COLA of about $50.

Richtman notes, “That is not enough for a tank of gas or half a week’s worth of groceries in many states. The net COLA will barely cover one brand-name prescription co-pay for some patients.”

Last year, Richtman noted that the COLA of 8.7% was unusually high, the highest in some 40 years. But post-pandemic inflation was also at record highs, he said, noting that historically, COLA’s have been relatively low. In fact, the COLA has been ZERO; three times since 2009.

“Seniors deserve an accurate COLA formula that accounts for the impact of inflation on their living costs. That is supposed to be the entire purpose of a COLA. The current formula measures the impact of inflation on urban wage earners and clerical workers. How is that a reasonable formula for seniors? Seniors have different spending patterns than urban wage earners & clerical workers,” asks Richtman.

Richtman notes that seniors spend more than other age group on expenses like housing, long-term care, and medical services. “We strongly favor the adoption of the CPI-E (Consumer Price for the Elderly) for calculating COLAs. The CPI-E would more accurately reflect the impact of inflation on the goods and services seniors need, he believes.

The CPI-E is included in both major pieces of legislation to expand and protect Social Security that have been introduced in this Congress: Bernie Sanders’ Social Security Expansion Act and Rep. John Larson’s Social Security 2100 Act. We have endorsed both of those bills as part of our commitment to boosting Social Security for current and future retirees. It’s past time for Congress to act,” says Richtman.

Although the 3.2% COLA is well above the 2.6% average over the past 20 years, a newly released retirement survey released on Oct. 12, 2023, by The Senior Citizens League (TSCL) indicates that seniors are pessimistic about their financial well-being in the upcoming months and very concerned about growing calls on Capitol Hill for Social Security cuts. Sixty-eight percent of survey participants report that their household expenses remain at least 10 percent higher than one year ago, although the overall inflation rate has slowed. This situation has persisted over the past 12 months.

According to TSCL’s latest retirement survey, worry that retirement income won’t be enough to cover the cost of essentials in the coming months is a top concern of 56 percent of survey respondents. Social Security benefit cuts are an even bigger concern, ranked as the number one worry by nearly 6 out of 10 survey participants, or 59%. Over the past year, benefit cuts and trims have affected a large percentage of older Americans low-income households, individuals who can least afford them.

A year ago, TSCL warned that higher incomes due to the 5.9% and 8.7% COLAs in 2022 and 2023 could potentially affect eligibility for low-income assistance programs such as SNAP and rental assistance. Earlier this year, federal emergency COVID assistance for SNAP (food stamps) and Medicaid also ended. Surveys conducted in 2022 and this year suggest that significant numbers of lower-income older households have lost access to some safety net programs over the past 12 months, the survey finds.

A Final Note…

Social Security plans to start notifying beneficiaries about their new COLA amount by mail starting in early December. Individuals who have a personal “my Social Security account” can view their COLA notice online, which is secure, easy, and faster than receiving a letter in the mail. People can set up text or email alerts when there is a new message–such as their COLA notice—instead of waiting for them in my Social Security.

People will need to have a “my Social Security account” by November 14 to see their COLA notice online. To get started, visit www.ssa.gov/myaccount.

Information about Medicare changes for 2024 will be available at www.medicare.gov. For Social Security beneficiaries enrolled in Medicare, their new 2024 benefit amount will be available in December through the mailed COLA notice and my Social Security’s Message Center.

For details about SSA’s 2024 Changes, go to: https://www.ssa.gov/news/press/factsheets/colafacts2024.pdf.

Will Magaziner fulfill call to reestablish House Aging Committee?

Published in RINewsToday on October 9, 2023

With Congressman David Cicilline retiring from Congress, no House lawmaker has yet stepped up to reintroduce, H.R. 583, the Rhode Island lawmaker’s resolution to reestablish the House Select Committee on Aging (HSCoA). Without receiving a vote in the House Rules Committee at the end of the 117^th Congress, the resolution was considered “dead.” On his way out Cicilline was not successful in passing the legislative baton and finding a new original sponsor.

The resolution to approve the initial HSCoA was passed on October 8, 1974, by a large margin (299–44) in the House. Its legislative duties expired in 1992 during the 103^rd Congress, as the House leadership was under pressure to reduce its internal costs to save $1.5 million and to streamline the legislative process.

On May 26, 2016, Cicilline began his legislative efforts to bring back the HSCoA. The simple resolution, consisting of 245 words, would authorize the Select Committee to study the use of all practicable means and methods of encouraging the development of public and private programs and policies which will assist seniors in taking a full part in national life and which will encourage the utilization of the knowledge, skills, special aptitudes, and abilities of seniors to contribute to a better quality of life for all Americans.

HSCoA would not craft legislative proposals, but hold investigative hearings to put the Congressional spotlight on aging issues. Its purpose was to push for legislation and other legislative actions, working closely with standing committees, through regular committee channels.

According to the Congressional Research Service, it would be relatively simple to create a select committee by approving a simple resolution that contains language establishing the committee—giving a purpose, defining membership, and detailing other issues that need to be address. Salaries and expenses of standing committees, special and select, are authorized through the Legislative Branch Appropriations bill.

Once introduced, the resolution would be referred to the House Rules Committee for consideration. If passed, it would be scheduled for a floor vote. If passed, no Senate action or Presidential signature would be required.

The fourth time’s not the charm

Over eight years (during four Congressional Sessions), Cicilline was unsuccessful in getting the support of either the Republican or Democratic House Speakers to pass his resolution. During the 114^th Congress Cicilline began his legislative push to bring back the HSCoA by introducing H. Res. 758. Twenty-eight Democratic lawmakers out of 435 House members (with no Republican supporting) became cosponsors. But it caught the eye of the co-chairs of the Seniors Task Force (later renamed the House Democratic Caucus Task Force on Aging & Families), Congresswomen Doris Matsui (D-CA) and Jan Schakowsky (D-IL). The lawmakers became cosponsors of this resolution.

Correspondence penned by Cicilline to House Speaker Paul Ryan (R-WI) requesting support of H.R. 758 went unanswered. Without the blessings of the GOP House Speaker, the resolution was not considered in the House Rules Committee and no floor vote scheduled.

Two years later, with Ryan’s GOP caucus still retaining the control of the House during the 115^th Congress, Cicilline’s H. Res. 160 would again not gain legislative traction. At that time only 27 Democratic lawmakers stepped forward to become cosponsors, just like the previous Congressional session, with the resolution not attracting one single GOP lawmaker as a cosponsor.

For the third time, during the 116^th Congress, Cicilline would introduce H. Res. 821 to resurrect the HSCoA. Even with House Speaker Nancy Pelosi controlling the lower chamber’s legislative agenda, the resolution would not get Rules Committee consideration, again blocking it from reaching the floor for a vote.

Even with House Speaker Pelosi retaining the gavel again during the 117^th Congress, Cicilline could not push H. Res 583 to the legislative goal line. Like Cicilline’s other three attempts, the resolution was referred to the House Committee on Rules for mark-up and vote. Without Pelosi’s blessings and support for passage, like previous attempts, the resolution died at the end of the Congressional session.

Cicilline’s efforts drew the support and attention of Max Richtman, President and CEO of the Washington, DC-based National Committee to Preserve Social Security and Medicare, who was former Staff Director of the Senate Special Committee on Aging, the Leadership Council of Aging Organizations (representing 66 national aging groups), along with President Nancy Altman of Social Security Works, and Chair of Strengthen Social Security Coalition.

Robert Weiner, former chief of staff of the HSCoA, Tom Spulak, former staff director and General Counsel of the House Rules Committee, and Vin Marzullo, a well-known aging advocate in Rhode Island, were strong advocates for the resolution’s passage.

It’s a no-brainer not to bring back HSCoA

Weiner, the President of Robert Weiner Associates News, who was a close friend and confidant of Claude Pepper, clearly knew the importance Cicilline’s efforts to bring back the HSCoA and its impact on the quality of life of America’s seniors. Weiner, who served as Staff Director for the Subcommittee on Health and Long-term care from 1975 to 1977 and Chief of Staff of the full Aging Committee, from 1976 to 1980, remembered how the late Congressman Claude Pepper used the Select Committee as a force to push Congress to tackle aging issues.

“Bringing it back would be immeasurably helpful regardless of which party has the White House or controls Congress in assuring the best health care programs for seniors,” says Weiner.

Weiner says that the HSCoA successfully prodded Congress to abolish forced retirement, investigate nursing home abuses, monitor breast cancer screening for older women, improve elderly housing, and bring more attention to elder abuse by publishing a number of reports, including “Elder Abuse: An Examination of a Hidden Problem and Elder Abuse: A National Disgrace,” and “Elder Abuse: A Decade of Shame and Inaction.” The Committee’s work would also lead to increased home care benefits for the aging and establishing research and care centers for Alzheimer’s Disease, he said.

“One of the best-known aging accomplishments of Claude Pepper was to end mandatory retirement by amending the Age Discrimination in Employment Act,” adds Weiner, noting that with HSCoA support the bill passed 359 to 2 in the House and 89 to 10 in the Senate, with President Jimmy Carter signing the bill into law despite strong opposition of the Business Roundtable and big labor.

Weiner noted that among the HSCoA’s other legislative achievements was supporting the passage of legislation creating standards for supplemental insurance and holding hearings to expose cancer insurance duplication. “Witnesses were literally forced to wear paper bags over their heads to avoid harassment by the insurance companies. That legislation became law,” he said.

According to Weiner, “Republican lawmakers just didn’t want to support Cicilline’s resolution to reauthorize the HSCoA,” says Weiner, despite the fact that Congressman John Heinz (R-Pa.), later a renowned Senator, was an original prime sponsor of the House resolution that would initially establish the select committee.

Seniors are now the most powerful voting block who would see the need, like Heinz, for a HSCoA, especially to protect Social Security, Medicare and other federal aging programs, says Weiner. Republican House lawmakers are threatening to cut Social Security benefits and raise the full-time retirement age, he warns, calling their actions “reforms.” “But the program is actually solvent, with trillions in surplus beneficiaries paid for as the Pepper-Reagan original deal provided,” he notes.

If HSCoA resolution is passed during the 118^th Congress, the Republicans would control its legislative agenda. Historically, the House select committee allowed open, bipartisan debate from different ideological perspectives to promote bipartisan consensus that, in turn, would facilitate the critical policy work of the standing committees.

Passing the torch

Who will ultimately pick up the legislative baton from Cicilline to become Rhode Island’s fiery aging advocate. Will it be Congressman Seth Magaziner, or the newly elected Congressman from Rhode Island’s Congressional District 1 to step to the plate?

Why shouldn’t Magaziner or Cicilline’s replacement follow in the footsteps of former Rhode Island Congressman John E. Fogarty (dec.) and be the original sponsor of legislation that will have a major impact on national aging policy. The lawmaker would become a hero to America’s seniors. The White House Conference on Aging was the result of legislation successfully sponsored by Fogarty, and led to the enactment of his bill to establish an Administration of Aging in the Department of Health, Education and Welfare. He was the original sponsor of legislation that established the Older Americans Act of 1965.

But even if a Rhode Island Congressman makes a decision to become the original sponsor to Cicilline’s resolution that reestablishes the HSCoA, passing this resolution in a GOP-controlled House will require support from that caucus.

Congressmen Brian Fitzpatrick (R-PA) and Josh Gottheimer (D-NJ), co-chairs of the “Problem Solvers Caucus,” consisting of essentially an equal number of 63 Republican and Democratic lawmakers, may well be the way to finally pass a resolution to reestablish the HSCoA.

Weiner, who would later become a senior staffer to both the Clinton and Bush White Houses and now is a national columnist and winner of the National Press Club President’s Award for recruiting young journalists, agrees that it is now time to bring the Problem Solvers Caucus to the forefront to endorse and together have a bipartisan House support push for reestablishing the HSCoA. “The Aging Committee has always been bipartisan, with leaders including not only Pepper and Ed Roybal as chairs, but supportive ranking minority members including then House members — later Senators — Chuck Grassley, Bill Cohen, and John Heinz.

Medicare to negotiate select drug prices with Big Pharma, lists first 10 drugs

Published in RINewsToday on September 4, 2023

While critics are attempting to go through the courts to put the brakes on allowing Medicare to negotiate and set drug prices, last week, the Biden administration announced its list of 10 drugs that will be subject to price negotiations mandated by the Inflation Reduction Act (IRA).

Earlier this month, more than 70 groups and a petition signed by 150,000 individuals called on Merck & Co., Bristol Myers Squibb Company, Janssen Pharmaceuticals, Astellas Pharma US, Pharmaceutical Research and Manufacturers of America (PhRMA) and the U.S. Chamber of Commerce, to drop their lawsuits to block the drug price negotiation provisions from taking place, and several organizations filed an amicus brief in support of the Biden administration’s historic law.

With President Biden signing the IRA into law in Aug. 2022, the Centers for Medicare and Medicaid Services (CMS) began hammering out the regulations by issuing on March 15, 2023 its initial guidance for its Medicare Drug Price Negotiation Program. At that time, CMS had received over 7,500 comments on its initial guidance from consumer and patient groups, drug companies and pharmacies. On June 30, 2023, the federal agency released its revised guidance detailing the requirements and parameters for the program. With the publishing of the listing of 10 drugs on August 29, 2023, for the first time, Medicare is now able to move forward in negotiating prices directly with drug companies, with the goal of lowering prices on some of the costliest prescription drugs.

According to CMS, the selected 10 drugs accounted for $50.5 billion in total Part D gross covered prescription drug costs, or about 20%, of total Part D gross covered prescription drug costs between June 1, 2022, and May 31, 2023, which is the time period used to determine which drugs were eligible for negotiation. The negotiations with participating drug companies begin now until 2024, and any negotiated prices will become effective beginning in 2026. Medicare beneficiaries taking the 10 drugs covered under Part D selected for negotiation paid a total of $3.4 billion in out-of-pocket costs in 2022 for these drugs.

It’s a Long Wait…Lower Prices to Take Effect Jan. 2026

CMS will publish any agreed-upon negotiated prices for the selected drugs by September 1, 2024; those prices will come into effect starting January 1, 2026. In future years, CMS will select for negotiation up to 15 more drugs covered under Part D for 2027, up to 15 more drugs for 2028 (including drugs covered under Part B and Part D), and up to 20 more drugs for each year after that, as outlined in the IRA. CMS will provide opportunities for public comment at patient-focused listening sessions in Fall 2023.

“For far too long, pharmaceutical companies have made record profits while American families were saddled with record prices and unable to afford life-saving prescription drugs,” says Secretary Xavier Becerra, of the U.S. Department of Health and Human Services (HHS). “Although drug companies are attempting to block Medicare from being able to negotiate for better drug prices, we will not be deterred,” she pledges.

With the announcement of the first drugs selected for Medicare drug price negotiation, CMS Administrator Chiquita Brooks-LaSure noted it marked a significant and historic moment for the Medicare program. ”Our goal with these negotiations is to improve access to some of the costliest drugs for millions of people with Medicare while driving competition and innovation,” she said.

Adds Meena Seshamani, MD, PhD, CMS’s Deputy Administrator and Director of the Center for Medicare, “Promoting transparency and engagement continue to be at the core of how we are implementing the new drug law and the Medicare Drug Price Negotiation Program, and that is why we set out a process for the first round of negotiation that engages the public throughout.”

“No one should have to choose between paying for lifesaving medication and other basic necessities, like food and housing,” says Rep. Seth Magaziner, representing Rhode Island’s Congressional District 2. Nearly 191,000 Rhode Islanders are enrolled in Medicare Part D and could be eligible for cost savings that results from CMS’s negotiating with drug makers, he says, noting that. Rhode Island seniors paid an average of $6,022 in out-of-pocket costs per year for one of the drugs selected for Medicare Price Negotiations. These drugs are used to treat some of the most common diseases like diabetes, heart disease, arthritis, blood clots, and cancers.

But PhRMA and U.S. Chamber of Commerce express strong concerns over imposing government price controls on the price of medications.

CMS’s release of 10 drugs selected for negotiation “is the result of a rushed process focused on short-term political gain rather than what is best for patients,” says PhRMA) President and CEO Stephen J. Ubl. “Many of the medicines selected for price setting already have significant rebates and discounts due to the robust private market negotiation that occurs in the Part D program today,” he claims.

“Giving a single government agency the power to arbitrarily set the price of medicines with little accountability, oversight or input from patients and their doctors will have significant negative consequences long after this administration is gone,” warns Ubl.

Furthermore, “insurance companies and their Pharmacy Benefit Managers may further restrict access to medicines through increased utilization management, higher copays and more restrictive formularies, notes Ubl.

USCoC also expresses strong concerns over HHS’s move to impose government price controls on medications. While USCoC is supportive of affordable medications, it warns that an implementing government price controls scheme is both “counterproductive and will restrict access to critical medicines, delay treatment for patients, and jeopardize the search for new lifesaving cures,” says Executive Vice President and Chief Policy Officer Neil Bradley.

“In its rush to implement the IRA’s price control scheme, the Biden administration failed to examine the likely negative side effects of the policy, charges Bradley.

Celebrating a Sweet Victory

“The negotiated drugs list is a watershed moment for medicine affordability. Drug corporations pretend this is a catastrophe, but I would rather see that money in seniors’ pockets than Big Pharma’s,” says Peter Maybarduk, director of the Access to Medicines program at Public Citizen

“Drug corporations, in crude arrogance, are suing to limit price negotiations under the IRA. But the list shows instead how important it is to expand those negotiation powers. Several monopolized drugs that are expensive for Medicare today are exempted from price negotiation, and will remain expensive,” predicts Maybarduk, explaining that for a many-years long grace period after a drug first comes to market. “During those years, drug makers will exploit patent monopolies with minimal checks on profiteering. That profiteering period is even longer for biologics, which comprise some of the most exorbitantly priced drugs,” he says.

“This is an historic day in the effort to lower prescription drug prices for seniors. The Biden administration has released the names of the 10 life-saving drugs that will be subject — for the first time ever — to price negotiation between Medicare and Big Pharma,” stated Max Richtman, President and CEO, National Committee to Preserve Social Security and Medicare.

According to Richtman, the Inflation Reduction Act provides for this reform, in addition to a $2,000 out-of-pocket cap for patients’ Medicare Part D drug costs and penalties for drug-makers who hike prices above the rate of inflation. Medicare price negotiation alone is expected to save seniors and taxpayers billions of dollars in drug costs over next the decade.

“This is a sea change in the government’s ability to lower prescription drug prices for older Americans, who all too often are compelled to ration medications or forgo filling prescriptions because of soaring costs. NCPSSM has fought for Medicare to be empowered to negotiate prices for some twenty years now,” adds Richtman., noting that the next step is to enlarge the number and type of medications subject to negotiation, to deliver maximum relief to seniors on fixed incomes.

“Allowing Medicare to negotiate prices for these first 10 drugs will finally bring much needed access and relief to American families, particularly older adults. We cannot overstate how monumental this law is for older Americans’ financial stability and overall health, said AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond.

“The big drug companies and their allies continue suing to overturn the Medicare drug price negotiation program to keep up their price gouging. We can’t allow seniors to be Big Pharma’s cash machine anymore. AARP will keep fighting to protect Medicare negotiation from any efforts to undo or weaken it, so all older Americans can afford their lifesaving medicines,” Says LeaMond.

And Alex Lawson, Executive Director of Social Security Works, says CMS’s listing of 10 drugs are among the most outrageously priced drugs on the market, calling these drugs, “Pharma’s prized cash cows.”

“This is just the beginning,” says Lawson, predicting that within a decade, Medicare will have the power to negotiate lower prices on well over 100 drugs. “That’s a huge win for seniors and people with disabilities,” she adds, noting that it is the biggest legislative defeat Big Pharma has ever suffered – and it won’t be the last.

Final Note…

Vincent Marzullo, who serves on the Board of the Senior Agenda Coalition of RI as well as a member of Congressman Magaziner’s Senior Advisory Committee, says that despite CMS’s announcement of the 10 drugs to be negotiated, consumers won’t realize a penny in savings until January 2026, 28 months from now. “Unfortunately, urgency seems not to be a feature of the Inflation Reduction Act at least when we will get lower priced prescriptions,” he says.

View a fact sheet from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) at: https://aspe.hhs.gov/sites/default/files/documents/705b9c384d493e442a1d4004905cf8ae/ASPE-IRA-Drug-Negotiation-Fact-Sheet.pdf.

More information on the Medicare Drug Price Negotiation Program is available at https://www.cms.gov/inflation-reduction-act-and-medicare/medicare-drug-price-negotiation.