This week, we take a look at the third right in The Senior Citizens Bill of Rights. This right ensures healthcare costs must be accounted for in the annual Social Security cost-of-living-adjustment (COLA) calculations. Healthcare is not a luxury item; it is a necessity. And in recent years, the costs of this necessary service have skyrocketed, contributing to a climate in which many seniors are forced to declare bankruptcy.
Comparing the Data
For the past decade, the annual COLA has never surpassed a 4% increase. The highest increase during this time was during 2011 when beneficiaries received a 3.6% increase in their payments.
In comparison, healthcare prices over the past decade have skyrocketed. Peter G. Peterson Foundation reports average spending of approximately $11,000 per person in 2018. This spending is explained to be 18% of the gross domestic product (GDP). According to the article, it is predicted that these costs will climb to an average of $18,000 per person, representing around 20% of GDP.
So why don’t the COLA calculations match the increasing healthcare costs? It has to do with how COLA is calculated. COLA calculations use the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W is a variation of the consumer price index (CPI); it measures the changes in consumer prices that affect certain workers. The CPI-W does not adequately consider healthcare costs.
Additionally, the article explains that the CPI has increased at an average annual rate of 2.1% over the past couple decades. However, this does not match the CPI for medical services; the CPI for medical services has grown at an average of 3.5% annually.
The article continues to explain the possible factors causing this rise in healthcare costs.
Seniors Declaring Bankruptcy
And although Medicare can be a great program, it is sometimes not enough. According to this article from Credit.com, Medicare does not cover all of seniors’ health costs; often it involves other expenses like copays, coinsurance, or deductibles. Paying these expenses out of pocket can be difficult for seniors to afford—especially since the benefits so many rely on often do not account for medical expenses.
Furthermore, the article explains that the increase in seniors declaring bankruptcy is partially due to the high healthcare prices, decline in pension fees, and lower incomes received.
Seniors Deserve Financial Security
Senior citizens deserve financial security, that is why our bill must be passed. The seven rights that make up our bill provide senior citizens with 7 guarantees. These guarantees will allow senior citizens to spend less time worrying about their finances and more time enjoying retirement. Join us in urging the politicians in Washington to pass our bill now.
