The Social Security Administration on Tuesday announced that there will be relatively little change next year in the monthly checks sent to more than 65 million Americans. That prompted protests from seniors’ groups about how this key source of income for many retirees lags rising medical costs.
Social Security officials said there will be a 0.3 percent cost-of-living adjustment next year in its benefit payments. That translates into an increase of $5 to $1,360 for the estimated average monthly payment for all retired workers, the agency said. That’s barely enough to cover the list price for a single pill of the widely used cholesterol drug Lipitor, according to Max Richtman, president and chief executive officer of the National Committee to Preserve Social Security and Medicare.
In Richtman’s view, these Social Security increases don’t even come close “to covering the true cost of living that retirees face.” He said that seniors typically spend more than $5,000 a year on health care costs alone.
The small projected increase is actually an improvement from last year, when there was no cost-of-living adjustment, said advocacy group AARP, which represents nearly 38 million older Americans. The group is pressing to make Social Security a more prominent issue in the presidential campaign.
“As prescription prices skyrocket and Medicare premiums and other health costs increase, many older Americans have understandable concerns,” said Jo Ann Jenkins, AARP’s chief executive, in a statement.
While marginal, the 0.3 percent increase could significantly raise Medicare premiums for some people, said Sen. Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee on Tuesday. About 7 in 10 people enrolled in Medicare are sheltered by a “hold harmless” provision that prevents increases in premiums from exceeding Social Security adjustments.
Congress will need to act this fall to protect the remaining 30 percent from spikes in the premiums, Wyden said. The exposed group includes wealthier people, new enrollees and people who don’t collect Social Security benefits, he said.
“Seniors in Medicare expect their health costs to be affordable and stable, and I’ll be looking at every option in the days ahead to make sure that remains the case,” Wyden said.
The Centers for Medicare and Medicaid Services on Tuesday did not release details about premiums and said it expects to release the 2017 information this fall. Medicare last year released the premium information in November following an October announcement on 2016 payment rates.
AARP and other groups already have called on Congress to act to prevent increases for some beneficiaries in their Medicare premiums.