Legislative Update for Week Ending October 19, 2012

Legislative Update for Week Ending October 19, 2012

The Congressional recess continued this week, with Members of Congress remaining in their home states and districts. Meanwhile, the Social Security Administration (SSA) announced a 1.7 percent cost-of-living adjustment (COLA) for 2013, and the Kaiser Family Foundation, a private, non-profit organization, released an important study on one Medicare reform proposal.

Pre-Election Recess Continues

Members of Congress remained in their home states and districts this week to prepare for the November election. They are expected to return to Capitol Hill to begin the lame-duck session on Tuesday, November 13th.  The Senior Citizens League (TSCL) would like to remind you that many Members of Congress will attend local events or hold town hall meetings in the upcoming weeks, giving voters an excellent opportunity to voice their concerns. We encourage you to approach your Senators and Representatives to request their support for fair COLAs and other key issues. To find contact information for your Members of Congress or to sign a petition, visit the ACTION CENTER of our website.

SSA Announces 2013 COLA

On Tuesday, SSA announced the much-anticipated COLA for 2013 Social Security benefits. The raise will equal a meager 1.7 percent – an amount that TSCL fears will not allow seniors to keep up with rising costs and increasing Medicare premiums. The 1.7 percent COLA will be one of the lowest paid to seniors in the past decade. The COLA for 2012 was 3.6 percent, and in the two years prior, no COLA was paid to seniors. TSCL Chairman Larry Hyland expressed his concerns about the COLA this week, stating: “The anemic growth in benefits will cause tens of millions of seniors to spend a bigger portion of their monthly Social Security payment on health care and other costs next year.”

The COLA that seniors currently receive is based upon the spending patterns of young, urban workers, and TSCL feels that the annual adjustments do not accurately reflect how seniors must spend their money. According to one study conducted by TSCL, seniors have lost thirty-four percent of their buying power since 2000, in large part because their COLAs do not allow them to keep up with skyrocketing medical costs. TSCL believes that seniors would be better served if their COLAs were based upon a consumer price index for elderly consumers, and we are working hard to increase support for legislation that would enact more fair COLAs.

Study Predicts Higher Costs under Premium Support Model

On Monday, the Kaiser Family Foundation released the findings of a new study about premium support, a model that some on Capitol Hill favor as an alternative to traditional fee-for-service Medicare. The study, which is just one of many on the subject, found that seniors would face higher medical costs under premium support plans where seniors would be given a fixed amount of money from the government to purchase health insurance coverage. Importantly, the authors of the study noted that they did not attempt to model any specific proposal and the report should not be taken as a direct analysis of the proposal backed by Governor Mitt Romney and his running mate Rep. Paul Ryan (WI-1).

According to the findings of the study, under premium support, nearly six out of ten Medicare enrollees would pay higher premiums for the same benefits that they now have. Since the system would rely on a competitive bidding process, the study found that premiums would vary widely across the country. In some states, beneficiaries would see no significant increase in premiums, but in those states with higher spending per enrollee, large out-of-pocket increases would likely be seen. In California, Michigan, New York, and Florida, for example, the authors predicted an average increase of at least $100 per month. In some counties, like California’s Los Angeles and Orange counties, the authors predicted an even larger increase of more than $200 per month.

Many, including TSCL, are wary of premium support models, since studies like the Kaiser Family Foundation’s have shown that they would increase the cost of coverage for seniors. In addition, polls have shown that seniors are not in favor of reforming the basic structure of Medicare. A recent survey conducted by TSCL showed that 70 percent oppose major changes, while only 13 percent said they support such changes to Medicare. TSCL believes that all seniors deserve affordable and quality care, and we will continue to oppose changes to Medicare that would result in higher out-of-pocket costs for health insurance coverage.