These are tough times for Hawaii’s older citizens, especially those who rely on Social Security. Nearly a quarter of older Hawaii residents rely on Social Security as their only source of income. For about half of our residents age 65, Social Security accounts for at least half of their income.
Each year, as kūpuna look through their checkbooks to figure out how to make ends meet, they take small comfort in knowing that Social Security provides a very modest cost of living adjustment to their benefits, or COLA for short. Recently, many older citizens find that their COLA barely outpaces the increase in health care costs they face through their Medicare Part B premiums.
So alarm bells started to ring this year when it was announced that there would be no COLA for 2010. The technical reason for this harsh news is no comfort: the formula for determining the COLA overestimates the cost of some items like fuel and underestimates the impact of health care costs, leading to a determination that there is no inflation, despite what your grocery receipts may be telling you. Changing the formula would be helpful, but would likely be a long legislative and bureaucratic fight.
AARP is acutely aware of this problem and we’re working to find immediate relief. While there is more to be done, there are encouraging signs of progress.
The first came in late September, when the House passed the Medicare Premium Fairness Act (HR 3631) by an overwhelmingly bi-partisan 406–18 vote. Hawaii’s House members can be thanked for supporting this bill, which would ensure that all Medicare beneficiaries are spared from an increase in Part B premiums in 2010 that would effectively shrink the Social Security checks of beneficiaries.
AARP is also calling on House and Senate leaders to provide emergency relief in the form of a one-time $250 payment to millions of older Americans who are struggling in this economic climate. AARP will work with members of Congress from both sides of the aisle to urge quick passage of legislation that will help combat rising health care and prescription drug costs that consume an increasing amount of older citizen’s income each year.
Older citizens spend a disproportionate share of their income (about 30 percent on average) on health care costs, which continue to increase well above the rate of overall inflation. The combination of higher health care costs, including prescription drug prices, and a stagnant Social Security benefit is particularly troubling and will result in lower net Social Security payments to millions of America’s older citizens in January 2010.
Providing older citizens, veterans and people with disabilities emergency relief similar to that originally provided under the American Recovery and Reinvestment Act (ARRA) of 2009 would bring the $250 payment in line with the Making Work Pay tax credit also provided under ARRA.
AARP urges Congress to provide some relief to older citizens whose costs continue to go up while their incomes remain stagnant. Please let your elected leaders know how important this issue is to you.