How Social Security Trust Got ‘Healthier,’ Beneficiaries Not So
Oct. 25, 2016 (EIRNS)—A Social Security cost-of-living adjustment (COLA) increase of just 0.3% was announced this week for 2017, after no increase at all in 2016. Increases in costs of health care and medications used by senior citizens receiving Social Security, alone make this COLA ludicrously small. But the government maintains a variety of measures of inflation, between the Bureau of Labor Statistics, the Federal Reserve, National Bureau of Economic Research, etc., and the lowest measure of all is used to calculate Social Security COLAs. The CPI-W, supposedly the inflation rate for goods and services used by the lowest-income quarter of the population, rose just 0.3% over the past 12 months. But the CPI-U, which is supposed to reflect goods and services used by nearly 90% of the population, rose 1.5%; and the CPI-E (for elderly, considered "experimental") rose 1.9%. All of these indexes use methods—long exposed by EIR and others, but driven ahead anyway since the 1980s—of suppressing the real, much higher, inflation rate.
The premium that Social Security recipients pay for insurance for doctor and lab visits (Medicare Part B) will be able, by law, to increase only that same 0.3% in 2017—for 70% of those recipients. But the other 30% will be hit hard, because Medicare’s costs for Part B medical services have gone up far more. Consider, that since Obamacare was passed in 2010, healthcare costs have risen at an average 20%/year, although the costs ultimately paid out by the final consumers of healthcare are said to have risen 2.7%/year, after subsidies, losses taken by hospitals, labs and doctors, etc.
In November, the Center for Medicare Services will announce how big a jump in Part B premiums the "other 30%" of beneficiaries will have to pay—with effectively no COLA increase. The 30% include new Social Security beneficiaries, low-income elderly people on both Medicare and Medicaid, people on Medicare who haven’t started taking Social Security, and beneficiaries with upper-middle to higher incomes.
And virtually all beneficiaries will see their healthcare and health insurance premiums rise substantially, especially the "Part B supplements" which most need to help pay their actual costs for doctor visits and lab tests.
So, Social Security income, in real terms, will decline in 2017, as it has nearly all years of the Obama Administration. This is the basis of Obama’s brag that he has "extended the life of the Social Security Trust Fund by 10 years"—but cutting the lifespans of its beneficiaries.