If you thought seniors fighting phantom cuts in their Medicare benefits at those town hall meetings were angry, wait until the first of the year when it dawns on all of them they're getting no cost of living increase for the next two years. In fact, six million of Social Security's 50 million recipients will suffer a pay cut and all will pay more for drugs.
I say "phantom" cuts because all of the health reform proposals in Congress are no where near being enacted into law. In stead, it has been a propaganda war between special interests in the health industry and opposing political parties in which the dominant argument is stupidly focused on creation of government "death squads" to euthanize the elderly. Fostering fear is the Obama administration's proposal to cut billions of dollars in Medicare costs as "savings" without spelling out where these cuts will occur. Some seniors translate that as cuts in their benefits.
January 1, 2010, will be the first time since 1975 Social Security beneficiaries will not receive a cost of living (COLA) adjustment. By law, the government cannot decrease benefits. In the past, COLA increases oftentimes were offset by increases in Medicare Part B medical premiums deducted from Social Security checks. The result was seniors annually falling behind because of the spiraling rise in medical bills outdistancing less inflationary sectors of the economy.
However, the law does not prevent the increase in premiums for Medicare Part D drug subsidies.
There are about six million seniors whose Medicare Part D drug subsidy program is also deducted from their Social Security checks. It is these who would face an average increase of $2 per month from their current $28/mo drug premiums although the amount varies by plan and the private insurance carrier administering the program for the federal government.
On the surface, this doesn't appear to be a big deal. But it is to both seniors and the nation's taxpayers.
Estimates vary but the consensus is about 25% of the 50 million seniors live in retirement with fixed income totally reliant upon their Social Security checks which average nationally at about $1,150/mo. The remaining 75% have seen their retirement and pension plans reduced by at least half because of the recession. Unless you live in your own mortgage-free home, there's not much playing around money for any of them.
For the government, increasing Medicare premiums excluding Part D without a compensating COLA is forbidden by law. That means the government would absorb billions of more dollars annually adding to the trillion dollar deficit to make up the difference in which the premium increase would have covered.
I can only address the situation from the perspective of a single person living solely on Social Security and meeting eligibility standards for Medi-Caid and rental assistance through the Housing and Urban Development agency.
Medi-Cal is broke and no longer pays my $96/mo Medicare premium. The government subsidizes Health Net to pick up all medical expenses. I pay a nominal $3.10 for each 30-day drug prescription. Every year Health Net changes the rules of what it will and will not cover. I'm a slave to their whims and am waiting with anticipation of what roadblock they will set for 2010. Last year it was no reimbursement for hospital costs. This year hospitalization was covered but should I need an ambulance to get there I had to pay $50.
Already, the Riverside (California) Housing Authority which administers HUD's rental assistance program notified me that beginning Oct. 1 I had to pay $50/mo. more for my apartment rent. I suppose that will make a major difference in HUD's $18.2 billion budget helping two million families in 2010.
So, when you hear us gray panthers (we no longer are gender biased) roar, it's more than a measly $2 increase in our drug premiums. It is more like being nickled and dimed to death.Sources:
Politics & Poppycock