How Health Care Costs Eat Away at the Social Security COLA
Social Security beneficiaries will receive a 2.8 percent bump in benefits in 2026, but don’t get too excited. Health care costs are expected to eat up that extra money.
Starting in January, retirees receiving the average benefit amount will receive an additional $56 each month. However, a Social Security analyst told U.S. News & World Report that most recipients won’t even feel the benefit boost because of Medicare premium and deductible increases.
COLA Calculator is Flawed
The annual Social Security cost-of-living adjustment (COLA) is supposed to ensure that benefits cover inflationary expenses. The problem is that the Social Security Administration bases its COLA on the consumer price index for urban wage earners and clerical workers, also known as the CPI-W.
It measures the cost of goods and services typically used by these workers, and their spending does not align with that of seniors. Health care is a huge expense for retirees. That’s one of the main reasons senior advocates, such as The Seniors Trust, are pushing for a new COLA calculator. They want to base the annual COLA on the Consumer Price Index for the Elderly, or CPI-E. This research index tracks the spending patterns of Americans ages 62 and over.
Congress Can Help
The time has come for Congress to enact the Social Security Expansion Act.
Not only does this bill ensure that Social Security benefits keep pace with inflationary increases in senior spending, but this landmark piece of legislation would also extend the solvency of the Social Security trust fund through 2096, expand Social Security benefits by about $200 a month for current and new beneficiaries, require millionaires and billionaires to pay their fair share into Social Security by lifting the wage cap, and improve the Special Minimum Benefit for Social Security recipients which would help low-income workers stay out of poverty.
Is this something you can get on board with? Join us in urging lawmakers to enact the Social Security Expansion Act. You can show your support by signing our petition.
