Fwd: SOCIAL SECURITY COLA

[Guest guest]

October 19, 2004Social Security Gets 2.7 Percent BoostBy ROBERT PEARASHINGTON, Oct. 19 — Social Security benefits for more than 47 millionAmericans will increase 2.7 percent next year, the government announcedtoday. But higher Medicare premiums will take nearly half of theincrease for a typical beneficiary.The squeeze on Social Security payments reflects that health costs arerising much faster than consumer prices in general.The annual cost-of-living adjustment for Social Security is based on therise in the Consumer Price Index. Medicare premiums, by contrast, areset at the level needed to finance about one-fourth of the cost of PartB of Medicare, which pays for doctors' service and other outpatientcare.Social Security officials said the average monthly cash benefit forretired workers would rise to $955 in January, from $930 this year, anincrease of $25 a month.But the Bush administration announced in September that the monthlyMedicare premium would rise $11.60, or 17.4 percent, to $78.20, from thecurrent $66.60. The increase in Medicare premiums will thus take 47percent of the increase in the average Social Security benefit forretired workers.Most elderly and disabled people have their Medicare premiums deductedfrom their monthly Social Security checks. D. Novelli, chief executive of AARP, the lobby for olderAmericans, said, "Far too many Social Security beneficiaries will seethe Social Security cost-of-living adjustment partially or completelyeroded by the Medicare premium increase." For 8 of 10 retirees, SocialSecurity is the main source of income, he noted.Retirees, like other consumers, also face the prospect of higher heatingbills this winter. Those costs, like medical costs, are increasing muchfaster than Social Security benefits.Representative Pete Stark of California, senior Democrat on the JointEconomic Committee of Congress, said, "Nearly 13 million beneficiarieswill have half or more of their cost-of-living adjustments taken away bythe increase in Medicare premiums next year." That group includes twomillion people whose Social Security benefits will essentially befrozen, with the allowance for inflation completely offset by theincrease in Medicare premiums.In his presidential campaign, Senator Kerry has repeatedly accusedPresident Bush of mismanaging Medicare, and he asserts that Mr. Bush isresponsible for the increase in Medicare premiums scheduled to takeeffect in January.Mr. Bush says the premiums are set under a formula established by law,and the Bush campaign notes Mr. Kerry, as a senator, voted for the law,in 1997.Factors contributing to the increase in premiums include general medicalinflation, new preventive services and other benefits, and higherMedicare payments to doctors, health maintenance organizations and otherprivate health plans.Copyright 2004 The New York Times

October 19, 2004

Social Security Gets 2.7 Percent Boost

By ROBERT PEAR

ASHINGTON, Oct. 19 — Social Security benefits for more than 47 million

Americans will increase 2.7 percent next year, the government announced

today. But higher Medicare premiums will take nearly half of the

increase for a typical beneficiary.

The squeeze on Social Security payments reflects that health costs are

rising much faster than consumer prices in general.

The annual cost-of-living adjustment for Social Security is based on the

rise in the Consumer Price Index. Medicare premiums, by contrast, are

set at the level needed to finance about one-fourth of the cost of Part

B of Medicare, which pays for doctors' service and other outpatient

care.

Social Security officials said the average monthly cash benefit for

retired workers would rise to $955 in January, from $930 this year, an

increase of $25 a month.

But the Bush administration announced in September that the monthly

Medicare premium would rise $11.60, or 17.4 percent, to $78.20, from the

current $66.60. The increase in Medicare premiums will thus take 47

percent of the increase in the average Social Security benefit for

retired workers.

Most elderly and disabled people have their Medicare premiums deducted

from their monthly Social Security checks.

D. Novelli, chief executive of AARP, the lobby for older

Americans, said, " Far too many Social Security beneficiaries will see

the Social Security cost-of-living adjustment partially or completely

eroded by the Medicare premium increase. " For 8 of 10 retirees, Social

Security is the main source of income, he noted.

Retirees, like other consumers, also face the prospect of higher heating

bills this winter. Those costs, like medical costs, are increasing much

faster than Social Security benefits.

Representative Pete Stark of California, senior Democrat on the Joint

Economic Committee of Congress, said, " Nearly 13 million beneficiaries

will have half or more of their cost-of-living adjustments taken away by

the increase in Medicare premiums next year. " That group includes two

million people whose Social Security benefits will essentially be

frozen, with the allowance for inflation completely offset by the

increase in Medicare premiums.

In his presidential campaign, Senator Kerry has repeatedly accused

President Bush of mismanaging Medicare, and he asserts that Mr. Bush is

responsible for the increase in Medicare premiums scheduled to take

effect in January.

Mr. Bush says the premiums are set under a formula established by law,

and the Bush campaign notes Mr. Kerry, as a senator, voted for the law,

in 1997.

Factors contributing to the increase in premiums include general medical

inflation, new preventive services and other benefits, and higher

Medicare payments to doctors, health maintenance organizations and other

private health plans.

Copyright 2004 The New York Times