Ask virtually any senior citizen about the cost of health care and they will tell you the amount they pay out increases significantly from year to year. That is why the 1.5 percent increase in Social Security benefits expected next year will do little to help the plight of older Americans.
The 1.5 percent increase is based on preliminary figures used to determine the cost-of-living adjustment for Social Security recipients, disabled veterans and federal retirees.
Nearly 58 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,162. A 1.5 percent raise would increase the typical monthly payment by about $17. The COLA also affects benefits for more than 3 million disabled veterans, about 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor.
The 2014 raise will be among the smallest since automatic increases began in 1975, according to an analysis by The Associated Press. The COLA is usually announced in October to give Social Security and other benefit programs time to adjust January payments. The Social Security Administration has given no indication that raises would be delayed because of the shutdown, but advocates for seniors said the uncertainty was unwelcome.
Advocates for seniors say the government's measure of inflation doesn't accurately reflect price increases older Americans face because they tend to spend more of their income on health care. Medical costs went up less than in previous years but still outpaced other consumer prices, rising 2.5 percent.
"This (COLA) is not enough to keep up with inflation, as it affects seniors," Max Richtman, who heads the National Committee to Preserve Social Security and Medicare, told the AP. "There are some things that become cheaper but they are not things that seniors buy. Laptop computers have gone down dramatically but how many people at 70 are buying laptop computers?"
Once Congress gets its financial house in order — and heaven knows when that will occur — lawmakers should take a hard look at whether the COLA adjustments for senior citizens take into account the expensive health care bills older Americans have to pay annually.