Medicare is the ever-growing elephant dragging the country under, so I’m pleased to see that its beneficiaries are starting to feel a bit of a squeeze. In Medicare rise could mean no Social Security COLA, the AP explains how Medicare premium increases are sucking up the full Social Security cost of living increase for many recipients:
When Medicare premiums rise more than Social Security payments, millions of people living on fixed incomes don’t get raises. On the other hand, most don’t get pay cuts, either, because a hold-harmless provision prevents higher Part B premiums from reducing Social Security payments for most people.
Predictably, most of the article focused on the hardships visited on seniors whose finances are being hurt by the lack of a Social Security boost. But luckily, the article devotes at least a little space to telling the cold, hard truth:
Older people might feel they are falling behind because they haven’t had a raise since 2009, but many are benefiting, said Andrew Biggs, a former deputy commissioner of the Social Security Administration who is now a resident scholar at the American Enterprise Institute.
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Consumer prices dropped, but Social Security benefits didn’t drop, Biggs said. At the same time, health care costs went up, but Part B premiums stayed the same for most beneficiaries.
“They are better off because of that,” Biggs said. “Somebody else is paying for a greater share of their health care. This will get me hate mail, obviously. But it is what it is.”
While I feel badly for senior citizens living on a fixed income and paying more toward Medicare, I feel worse about younger, working people who pay into Medicare, Social Security and the general coffers (through income tax) in order to pay for seniors’ pensions and health care. Many of these folks don’t have health insurance themselves, and certainly won’t be in a position to enjoy the relatively generous benefits received by those on Social Security and Medicare today.
I’d like to see Social Security payments actually drop (not just hold steady) when Medicare cost increases are high. That might give seniors more of a stake in helping the country address the health care cost conundrum.