Seniors received a big increase in their Social Security benefits last year, but for many, it wasn’t what they wanted. One woman said she was worried that the change in her payment would mean she wouldn’t be able to afford an oxygen machine.
Carol Nine, 64, of Indiana, said Social Security used to be enough to pay for all her and her husband’s necessities. She received $917 a month in Social Security disability benefits and would not suffer below that amount.
However, in January 2023, the Social Security Administration (SSA) increased payments by 8.7% to offset inflation, increasing benefits for seniors by an average of $147. This sounds good on paper, but the extra $100 Nine earned made her ineligible for Medicaid, and she is now struggling to make ends meet.
“It would be assumed that there would be cost-of-living adjustments. [COLA] “COLA is supposed to be money to cover increases in inflation, so it shouldn’t be counted as an increase in income to determine whether someone gets Medicaid,” Nine said. Newsweek. “This is not the case.”
Since losing Medicaid, she has to pay extra out of pocket. This year alone, Nine spent more than $600 to cover her medical expenses.
“The coke I’m receiving now isn’t even close to this amount,” Nine said. “We can’t afford many essentials right now because of this.”
She said the impact on COLA and Nine health insurance doesn’t just impact her finances. She had cataract surgery, hammer toe surgery, several appointments with a pain management specialist, a much-needed visit to a gastroenterologist, and even two types of diabetes and migraine medication. They could have a serious impact on her health, as she had to cancel. And Nine believes she will have to make further cuts in the future.
“I think the next thing that will be used will be oxygen generators,” she said. “I wonder how many other Social Security recipients this has happened to?”
Nine also lost their eligibility for food stamps because their husbands also received Social Security benefits and their gross incomes increased beyond the threshold.
“We have had to cut our budget because food is one of the few things we can cut spending on because inflation is so high and food prices are so high right now,” Nain said. Ta.
It’s unclear how many Social Security recipients have lost Medicaid and other benefits due to COLA increases, but this is not unusual.
COLAs can also push seniors into higher tax rates, and in some cases, they could be forced to pay taxes on their benefits even if they didn’t pay taxes before the COLA enhancement .
According to the National Council on Aging, approximately 25 million Americans age 60 and older currently live at or below 250 percent of the federal poverty line.
“I thought the COLA would cover the effects of high inflation and not cause many of us to pay or forego desperately needed health care costs,” Nain added. .
Seniors and people with disabilities will have to pay more for their monthly benefits, as the Federation for the Elderly recently predicted that the 2025 COLA will likely be only 1.75%, in stark contrast to increases in 2024 or 2023. I feel anxious. This is a significant decrease compared to her increases of 3.2 percent and 8.7 percent over the past two years.
And even if SSA calculates a higher annual COLA, many seniors already feel like it’s not enough to cover their living expenses amidst inflation.
According to PRM Financial Advisor Roksolana Ponomarenko, COLA is particularly focused on the consumer price index for urban wage earners and office workers (CPI-W), which does not reflect the reality of the elderly. It is said that there are many cases where this is not the case.
“This discrepancy is primarily due to the fact that CPI-W tends to spend more on employed rather than retired people, who tend to spend more on sectors where prices are rising faster than the overall rate of inflation, such as health care and housing,” Ponomarenko said. “This happens because we are measuring individual spending patterns.” newsweek.
Because of this method of calculation, many seniors are still unable to defer payments to cover rising medical and housing costs.
“This is a classic case of ‘too little, too late,'” Ponomarenko said. “COLA lags behind real-time cost-of-living increases, and seniors are left with no choice but to make up the difference with ever-dwindling savings.” ” he said.
Many economists have suggested that following the CPI-E (Consumer Price Index for the Elderly) may be a better COLA metric, but geographic variation in the cost of living may also be an issue for seniors. .
“Right now, we’re not able to keep up with seniors when they need it most,” said Brandon Selfords, CEO of Bridge, a life settlement and Medicare insurance company. newsweek. “My hunch is that poverty among the elderly will continue to increase.”
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