Seniors Could See Greater Health Cost…Because Of Low Gas Prices
A bigger portion of older people's income could be going to healthcare costs next year. As Hannah Meisel reports, this change is based on something seemingly unrelated: Low gas prices.
Each year, the federal government releases what's called a "consumer price index," that lays out the amount of inflation observed in the U.S. economy. Social Security and other government beneficiaries will receive a cost of living increase tied to inflation. But economists this year predict there will be no cost of living adjustment, known as a COLA, because gas prices have been so low.
But that doesn't mean healthcare costs, like Medicare Part B premiums will freeze along with the COLA. Claudia Lennhoff, executive director of the Champaign County Health Consumers advocacy group, says that means seniors will have to tighten their belts.
"That's their source of income," she said. "That's how they pay their bills. That's how they pay for living expenses. Those expenses continue to go up every year. There is a real increase in what it costs to be able to live....People are having to do more with less."
Lennhoff says this measure of inflation isn't fair.
"Somebody's rent may go up from year to year," she said. "Their prescription costs may go up. The food that they buy...may continue to go up. And so the folks who depend on Social Security, they're on a fixed income and they should be able to count on a little bit of an increase at least every single year."
The federal government will announce its COLA decision Thursday, and its Medicare premiums later this fall..