Social Security Benefits to Remain Flat in 2016, While Millions Could Get Stuck With Huge Medicare Increases
For only the third time in 40 years, the nation's elderly and disabled Social Security recipients will not receive an increas...Read more
Social Security recipients could see their payments reduced because of the new Medicare prescription drug benefit, according to a report released by Democrats on the Joint Economic Committee.
"Seniors' Social Security cost-of-living adjustments [COLA] and benefits are under attack from Republicans," said Rep. Pete Stark, the ranking Democratic member on the committee. "This is one more step in the Republicans' plan to ignore Social Security benefits and try to privatize it. ... This is terrorism enacted against our seniors."
While Medicare beneficiaries' premiums for Part B, which covers physician and outpatient care, cannot rise above annual COLA increases in their Social Security benefits, Democrats have found that the same protection was not included for premiums under the new Medicare Part D, which will cover prescription drug costs beginning in 2006.
Instead, the Republican-written prescription drug benefit, signed into law last year and scheduled to take effect in 2006, ties the drug benefit premium to drug price inflation, which has risen far faster than the Consumer Price Index.
"Seniors are exposed to the possibility that large increase in medical costs, especially prescription drug costs, could eat up a large piece of their Social Security COLA and, for some, even reduce the size of their Social Security check," Democrats on Congress' Joint Economic Committee said in a new report.
The Democrats' report finds that for a person with a monthly benefit of $500 (in 2004 dollars), the annual increase in combined Part B and Part D premiums will absorb nearly 60 percent of the annual COLA, on average, during the 2007-2010 period and nearly 70 percent of the COLA in the 2011-2014 period.
Bush administration officials said the report was faulty and that the alternative would be no drug coverage at all.
House and Senate Democrats will introduce legislation that would guarantee beneficiaries could retain at least 75 percent of their Social Security COLA each year, regardless of increases for Medicare Part B and D premiums.
Download a press release and link to the full text of the JEC Democrats' report, "Rising Medicare Premiums Undermine the Social Security COLA," in PDF format by clicking on: http://jec.senate.gov/democrats/Documents/Releases/colaprotectionrelease21july2004.pdf (If you do not have the free PDF reader installed on your computer, download it here.)
For an article on the report in the San Francisco Chronicle, click here. (Article may no longer be available.)
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