Number Of Retirees Who Spent Up To Half Of Their Social Security Benefits On Healthcare Jumped 7% In 2014

Number Of Retirees Who Spent Up To Half Of Their Social Security Benefits On Healthcare Jumped 7% In 2014

New Survey From The Senior Citizens League

Alexandria, VA: Twenty – five percent of Social Security recipients report that they spent about one – third to one - half of their Social Security benefits on Medicare and other healthcare costs in 2014, according to a new survey by The Senior Citizens League (TSCL). That's a hefty 7 percent more than the 18 percent of older Americans who reported the same level of spending in 2013.

The results are instructive because Medicare Part B premiums did not increase in 2014, and Social Security benefits remained relatively flat as well, growing by only 1.5 percent. That points to higher premiums for Medicare supplemental coverage and Part D, or Medicare Advantage plans, higher out-of-pocket costs, particularly for prescription drugs and co-insurance, and more medical services as being largely to blame. "Social Security beneficiaries were forced to dig deeper into their retirement income just to pay for their healthcare," says TSCL chairman Ed Cates. "And that trend may continue this year as well," says Cates.

In 2015 Medicare Part B premiums have remained at $104.90 per month, the same level as 2013 and 2014. In addition, Social Security benefits increased only 1.7% this year, increasing the average benefit by about $20 per month. "At the same time, drug manufacturers continue to announce unprecedented cost increases that can't be justified," Cates notes. This includes the cost of generics as well as the costs for brand-name and specialty drugs.

This trend illustrates the dilemma for older Americans, over half of whom rely on Social Security for the majority of their income. Steeply rising medical costs can eat into retirement incomes, leaving less for other essentials like housing and food. According to the U.S. Administration on Aging, the median income of older persons in 2013 was $29,327 for males and $16,301 for females.

According to TSCL’s survey, the majority support proposals that would make Social Security benefits more generous, by boosting the monthly payment about $70 per month, and by using the Consumer Price Index for the Elderly (CPI-E) to calculate the annual cost-of-living adjustment (COLA). The survey found that a big majority of participants would strengthen Social Security's financing and pay for expanded benefits by raising the taxable maximum wage limit so that people who earn more than $118,500 would pay their fair share of Social Security taxes on earnings over that amount.