Seniors’ income, costs go up

By Dave Gomez

Senior citizens nationwide will receive a mixed bag next year in the form of higher Social Security checks along with higher Medicare premiums.

The Social Security Administration announced a 2.7-percent cost of living adjustment increase in monthly Social Security and Supplemental Security Income checks for 52 million Americans earlier this month.

However, the government also announced an increase in Medicare Part B premiums for next year, up from $66.60 a month in 2004 to $78.20.

By law, the Part B premium increase cannot be larger than a beneficiary’s COLA increase.

Part B of Medicare covers physician and outpatient services, while Part A covers hospital-related services, said James Ciesla, assistant professor in the School of Allied Health Professions.

Part A carries no monthly premium if the recipient or his/her spouse has 40 or more quarters of Medicare-covered employment.

The increases are adjusted annually based on the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers.

Ciesla said the new adjustments are based across all age ranges and the overall price levels of all goods and services and do not reflect senior citizen’s spending habits.

Inflation is higher in the medical sector, which in turn proves more costly for senior citizens who spend more money for medical treatment and medication, Ciesla said.

Those who are better off will be able to absorb the cost, while others will find the increase more difficult to manage, Ciesla said.

AARP CEO William Novelli called the adjustment “good news and bad news.”

“Far too many Social Security beneficiaries will see the 2.7 percent Social Security COLA partially or completely eroded by the Medicare Part B premium increase this year,” he said.