JustCare

Tag: Medicare Part B

  • A small group of drugs make up most of Medicare drug costs

    A small group of drugs make up most of Medicare drug costs

    With Medicare prescription drug spending, the 80-20 rule applies. A new Kaiser Family Foundation analysis by Juliette Cubanski and Tricia Neuman finds that a small portion of Medicare Part B and Part D prescription drugs make up a large percentage of Medicare drug costs.

    Cubanski and Neuman estimate that Medicare Part D drug spending in 2019 was about $145 billion after rebates. Medicare Part D currently covers about 3,500 drugs purchased through a pharmacy. Just 250 of these drugs–brand-name drugs with no competitors–no generic substitutes or biosimilars, accounted for 60 percent of that prescription drug spending.

    The average net cost for each of these 250 drugs was $5,750. You have to wonder how many people with Medicare could not afford to fill these prescriptions given high Part D out-of-pocket costs. The ten costliest of these 250 drugs accounted for 16 percent of Medicare Part D spending but just .3 percent of all drugs covered under Part D. Cancer and diabetes medicines as well as medicine for rheumatoid arthritis are among the top ten.

    Bottom line: If Congress passes legislation to rein in Medicare prescription drug prices on 250 drugs, as specified in the House bill that passed in 2019, H.R.3, savings would be significant.

    Fifty drugs covered under Medicare Part B account for 80 percent of Part B drug spending. Medicare Part B covers drugs received in hospital or administered by a doctor in the doctor’s office. It does not cover drugs purchased from a pharmacy.

    In 2019, the ten costliest of these Part B drugs represented 43 percent of all Part B drug spending but just 2 percent of all the drugs Part B covers. Cancer, rheumatoid arthritis and osteoporosis drugs are among these top ten, as well as two drugs for macular degeneration.

    Cubanski and Newman suggest that policymakers in Congress might be wise to limit drug price negotiation to 250 drugs given that they account for such a high proportion of overall spending. However, they also recognize that there’s value in extracting savings from all drugs. What they fail to mention is that there are millions of people with Medicare who will be left with unaffordable drug and health care costs–and won’t be able to fill their prescriptions–if Congress limits negotiation to just 250 drugs and takes no further action to limit out-of-pocket drug costs. In addition, higher Medicare drug spending drives up Medicare premiums.

    Here’s more from Just Care:

  • What are Medicare premium and other costs in 2021?

    What are Medicare premium and other costs in 2021?

    The Medicare Open Enrollment period ends on December 7, so you still have time to review your Medicare options for 2021. Because the process is not fun, nearly 60 percent of people with Medicare do not review their options. But, particularly if you have Medicare Part D drug coverage or are enrolled in a Medicare private plan–a health plan offered by a corporate health insurance company–it could save you a lot of money. Regardless of whether you are enrolled in traditional or a Medicare private plan, you must pay a Medicare Part B premium.

    In 2021, the standard monthly Medicare Part B premium, which covers medical and outpatient care, is $148.50, a monthly increase of $3.90, from $144.60, for people with annual incomes of $88,000 or less in 2019. Your Social Security increase should cover that cost.

    Social Security benefits in 2021 will be up an average 1.3 percent from this year, around $20 a month. Some of that increase will go towards the higher Medicare monthly premium. Because Congress limited the amount the 2021 standard Medicare Part B premium could rise in Covid-relief legislation earlier this year, most people will have about $16.10 more a month after paying the standard Medicare Part B premium.

    In 2021, people whose modified adjusted gross income from two years ago as reported on their federal tax return–about six percent of the Medicare population–pay a Medicare Part B premium of:
    • $207.90 a month, if their income is above $88,000 and no more than $111,000.
    • $297.00 a month, if their income is above $111,000 and no more than $138,000
    • $386.10 a month, if their income is above $138,000 and no more than $165,000
    • $475.20 a month, if their income is above $165,000 and less than $500,000
    • $504.90 a month, if their income is $500,000 or more

    For couples with combined incomes of $330,000 or less two years ago, filing a joint tax return, the premium amount doubles. Couples with annual incomes above $330,000 and less than $750,000 each pay a $475.20 monthly premium. And, couples with annual incomes of $750,000 and above each pay a $504,90 monthly premium. Visit this CMS web site if you are filing separate returns.

    Medicare Part B annual deductible: $203, an increase of $5 from the annual deductible of $198 in 2020.

    People with incomes up to 135 percent of the federal poverty level, ($1,456 in monthly income for an individual and $1,960 for a couple in 2020; these amounts may increase in 2021) are eligible for help paying their premiums through Medicaid or a Medicare Savings Program.

    For more than four decades, the Medicare Part B premium (medical insurance) was the same for everyone regardless of income, geography or health status, a quarter of the cost of Part B services. (Medicare Part A, hospital insurance, is premium-free if you have contributed into Social Security for at least 40 quarters.)  In 2007, wealthier people with Medicare began paying higher premiums.

    Here are 2021 Medicare Part A costs:

    • There is no Medicare Part A premium if you or your spouse have at least 40 quarters of coverage.
    • The Medicare Part A premium, if you or a spouse has at least 30 quarters of coverage, is $259 a month; if you don’t have at least 30 quarters, the premium could be $471 a month.
    • The Medicare Part A inpatient hospital deductible is $1,484, an increase of $76 from $1,408 in 2020, and daily coinsurance for hospitalizations after day 60 is $371 a day in a benefit period; coinsurance for lifetime reserve days is $742 a day.
    • The Medicare Part A daily coinsurance for skilled nursing facility stays after day 20 is $185.50, an increase of $9.50 from $176 in 2020.

    Here’s more from Just Care:

  • Your projected Medicare benefits and costs in 2021

    Your projected Medicare benefits and costs in 2021

    We’re in the midst of the annual Medicare Open Enrollment Period, but we still don’t know what Medicare costs will be in 2021. We do know, however, that Congress has limited the amount Medicare Part B premiums can increase. As a result, Medicare costs should not go up a lot in 2021.

    The standard Part B premium likely will increase. The standard premium was projected to increase to $153.30 from $144.60 a month. But, Congressional legislation likely will limit the increase to less than $2.50 a month.

    However, if your annual income is $88,000 or more, your Part B premium is likely to increase even more. The Part B deductible will also likely increase several dollars from $198.

    The Part A premium, deductible and coinsurance will also be higher. The deductible to be paid at the start of a Part A hospital benefit period is projected to be $1,452 in 2021, up from $1,408. Supplemental coverage you get through the private insurance market or through a former employer or Medicaid, generally pays some or all of this cost.

    If you’re in a Medicare Advantage plan, a private insurance plan that offers Medicare benefits, you are still responsible for paying the Medicare Part B premium. On top of that, if you need a lot of costly care, your out-of-pocket costs could be as high as $7,550 in 2021, for in-network care alone. In addition, you will have a deductible and copays for your drugs.

    The standard Part D prescription drug plan will have a deductible of $445 in 2021. You will need to spend $6,550 before you receive catastrophic coverage. You will be responsible for 25 percent of the cost of your drugs until then. Once you reach the catastrophic coverage level, you will be liable for no more than 5 percent of the cost of your drugs.

    If you have diabetes and need insulin, some plans will offer insulin with a maximum $35 out-of-pocket monthly cost. However, the premiums for these plans are likely to be higher.

    If you are new to Medicare, you will have the choice of a range of Medigap plans, supplemental coverage that fills gaps in Medicare. But, the two most popular plans, C and F, will no longer be available. Instead, you will have a choice of D and G. Unfortunately, you may be locked into a Medicare Advantage plan if you are currently enrolled in one. Your ability to buy supplemental coverage if you want to switch to traditional Medicare may be restricted, depending upon the state you live in and your health status.

    Here’s more from Just Care:

  • You might pay less for insulin through Medicare Part D, beginning in 2021

    You might pay less for insulin through Medicare Part D, beginning in 2021

    The Kaiser Family Foundation reports that one in three people with Medicare have diabetes today, and they are paying an ever higher price for their insulin. A new Medicare initiative could save people with diabetes as much as $420 a year on their insulin.

    More than 30 million adults in the US have diabetes, including nine million people over 65. Medicare Part D covers insulin. Medicare Part D also covers syringes and needles. But, people with diabetes still pay a lot out of pocket in copays and deductibles. Medicare Part B only covers insulin if you need an insulin pump, in which case you pay 20 percent of the cost.

    Beginning in January 1, 2021, Medicare is making available insulin drug coverage for a maximum of $35 for a one-month supply. In order to pay this price, you must sign up for a Part D plan or Medicare Advantage plan that participates in this insulin savings model. You must also use an insulin product covered by the plan under this model.

    Insulin has been around now for more than 100 years. So, you would think it would cost almost nothing. But, companies have patented devices for administering it, in order to be able to raise its price dramatically in the US. A new RAND study finds that insulin prices in the US are now more than eight times higher than in 32 high-income comparison nations combined.

    In the US, the average price for insulin is around $100. But in Chile, it’s about $26, and in Turkey, it’s less than $4.00. In Canada, it’s about $18. In Japan, it’s less than $19. In Great Britain, it’s around $11.

    Net prices for insulin in the US are generally a lot lower than the manufacturer prices. Drug companies issue rebates and discounts in many cases. But, even factoring those in, the price Americans pay for insulin is easily still four times higher than the average of other countries.

    Prices for insulin weren’t always this high in the U.S. The price for rapid-acting insulin rose by more than 15 percent each year between 2012 and 2016. During this time, people with workplace health insurance paid literally twice as much for their insulin in 2106, $2,853 than they had in 2012, $1,432.

    Whether you are enrolled in traditional Medicare or a Medicare Advantage plan, Medicare also covers a range of services and supplies for people with diabetes. Medicare covers a glucose monitor, lancets and test strips, as well as an insulin pump and insulin if you need it. Call Medicare at 1-800-633-4227 for more information. If you are enrolled in a Medicare HMO or other private Medicare plan, call the health plan.

    Medicare will also sometimes cover foot care and therapeutic shoes for people with diabetes. For some people, Medicare covers diabetic self-training and education. Medicare also covers a diabetes prevention program. Talk to your doctor about these services and supplies.

    Here’s more from Just Care:

  • What are Medicare premium and other costs in 2020?

    What are Medicare premium and other costs in 2020?

    The 2020 standard monthly Medicare Part B premium, which covers medical and outpatient care, rises to $144.60. It represents a monthly increase of $9.10, from $135.50 this year, for people with incomes of $87,000 or less.
    Social Security benefits are increasing in 2020, up 1.6 percent from this year, an average of $24 a month. Some of that increase will go towards the higher Medicare monthly premium. But, most people will have about $15.00 more a month after paying the higher standard Medicare Part B premium.
    In 2020, people whose modified adjusted gross income from two years ago as reported on their federal tax return–about six percent of the Medicare population–pay:
    • $202.40 a month, if their income is above $87,000 and no more than $109,000.
    • $289.20 a month, if their income is above $109,000 and no more than $136,000
    • $376.00 a month, if their income is above $136,000 and no more than $163,000
    • $462.70 a month, if their income is above $163,000 and no more than $500,000
    • $491.60 a month, if their income is above $500,000

    For couples with combined incomes under $326,000 filing a joint tax return, the premium amount is double the individual income. Couples with incomes between $326,000 and $750,000 each pay a $491.60 monthly premium. And, couples with incomes over $750,000 each pay a $491.60 monthly premium. Visit this CMS web site if you are filing separate returns

    Part B annual deductible: $198, an increase of $13 from the annual deductible of $185 in 2019.

    People with incomes up to 135 percent of the federal poverty level, ($1,426 in monthly income for an individual and $1,923 for a couple in 2019; these amounts may increase in 2020) are eligible for help paying their premiums through Medicaid or a Medicare Savings Program.

    For more than four decades, the Medicare Part B premium (medical insurance) was the same for everyone regardless of income, geography or health status, a quarter of the cost of Part B services. (Medicare Part A, hospital insurance, is premium-free if you have contributed into Social Security for at least 40 quarters.)  In 2007, wealthier people with Medicare began paying higher premiums.

    Here are 2020 Part A costs:

    • There is no Part A premium if you or your spouse have at least 40 quarters of coverage.
    • The Part A premium if you or a spouse has at least 30 quarters of coverage is $252 a month; if you don’t have at least 30 quarters, the premium could be $458 a month.
    • The Part A inpatient hospital deductible is $1,408, an increase of $44 from $1,364 in 2019, and daily coinsurance for hospitalizations after day 60 is $352 a day in a benefit period; coinsurance for lifetime reserve days is $704 a day.
    • The Part A daily coinsurance for skilled nursing facility stays after day 20 is $176, an increase of $5.50 from $170.50 in 2019.

    Here’s more from Just Care:

  • Pelosi drug proposal would bring down drug prices

    Pelosi drug proposal would bring down drug prices

    Politico reports on House Speaker Nancy Pelosi’s drug pricing proposal. If Politico’s information about key elements is accurate, Americans could see prices cut in half for scores of the most widely used drugs. And, the Medicare Part D drug benefit finally will have an out-of-pocket limit.

    The Pelosi proposal, as Politico describes it, could link the cost of 250 commonly used brand-name drugs to their average price in six wealthy nations. Since Americans tend to pay about twice as much for drugs as people in Canada and Great Britain, we could see these drug prices drop by 50 percent.

    The government would negotiate drug prices for drugs responsible for the highest costs to Medicare and the US health care system. These drugs represent about half of Part D spending and include insulin. Why Pelosi’s proposal only covers 250 drugs and not every drug is an open question.

    If the federal government is unable to negotiate fair drug prices with drugmakers, it would use international reference pricing to set these drugs’ prices. They would be set at no more than 1.2 times the average price in six countries: Australia, Canada, France, Germany, Japan and the United Kingdom. International reference pricing is a policy, originally introduced in the Senate by Bernie Sanders and in the House by Ro Khanna, which President Trump has said he supports.

    Under the draft proposal, if drugmakers refuse to negotiate with the federal government or sell at the established price to both the government and private health insurers, they would face severe financial penalties. They would pay an excise tax of 75 percent of the gross sales of the drug the prior year. Pharmaceutical companies would face penalties if they offered the drug at the negotiated price to Medicare but did not offer the drug at the negotiated price to private insurers.

    While the financial penalty should be severe enough to induce pharmaceutical companies to sell their drugs at the established price, the Khanna and Sanders bills go a step further to ensure drug availability. Their bills would take away a pharmaceutical company’s exclusive license and give licenses to generic drugmakers if the pharmaceutical company set its drug’s price higher than the average in five wealthy nations.

    Pharmaceutical companies would not be permitted to increase the price of a drug more than the rate of inflation for as long as there was little or no competition for that drug. Pharmaceutical companies would incur financial penalties if they raised the price of any drug covered under Medicare Parts B or D above the rate of inflation after 2016 and did not either lower the drug’s price or refund the excess charge to Medicare.

    Government savings from paying lower prices for drugs under Medicare Part D would go to the NIH to fund more drug research.

    Here’s more from Just Care:

  • 2020 Social Security benefits should rise, but checks may not

    2020 Social Security benefits should rise, but checks may not

    Social Security transformed the nation, providing working families a basic measure of economic security when wages are lost in the event of old age, disability that prevents substantial gainful employment, or death.  One of Social Security’s most important features is that its benefits are adjusted every year automatically to offset increases in inflation, so that the modest but vital benefits do not erode over time. As a result, 2020 Social Security benefits should rise.

    It is crucial to understand that Social Security cost-of-living adjustments are not increases.  They are intended simply to allow people to tread water, to maintain their purchasing power. Unfortunately, the government’s cost-of-living adjustment for Social Security is based on inflation experienced by urban wage earners and clerical workers. That is because in 1972, when the automatic adjustments were enacted into law, the Bureau of Labor Statistics, the agency that keeps track of inflation, only prepared that one index.

    Of course, retirees and people with disabilities who are unable to work full-time have very different expenditures from urban workers and even from the general population.  On average, they have higher health care and prescription drug costs, which have been going up much more rapidly than general inflation. Overall, they spend less of their fixed incomes on the latest smart phones and flat screen televisions, where cost increases tend to be lower than general inflation.

    Consequently, retirees and people with disabilities tend to experience higher increases in their cost of living than younger workers do. Because they generally experience higher increases in their cost of living than workers, their Social Security adjustments are more often than not inappropriately low. As a result, Social Security beneficiaries are not even treading water, but rather losing ground. Nevertheless, even inadequate adjustments are better than none.

    The actual adjustment that will take effect this January cannot be calculated precisely until October, because it is based on the inflation rate of the third quarter of this year, which runs from July 1 to September 30, compared to the third quarter of last year.  Obviously, inflation during the month of September will not be known until this month ends.

    Until the size of the automatic adjustment is announced in the second half of October, we won’t know the precise percentage increase of Social Security benefits.  However, it is possible to provide a quite accurate estimate now of what the adjustment is likely to be.

    In April, Social Security’s actuaries projected that the  cost-of-living adjustment beneficiaries would receive in January, 2020 would be 1.8 percent, or about a $24 monthly increase for an average benefit, which  is $1,353.68. However, we have now completed two of the three months of the third quarter and so can make a more accurate estimate of the size of the adjustment.

    In recent months, thanks in large measure to President Donald Trump’s trade war with China, the economy is slowing and inflation has been lower. Consequently, 1.8 percent is likely to be the highest the January increase will be. Depending on what happens in September, it is likely to be closer to 1.5 percent, or about $20 more a month for an average benefit.

    Moreover, millions of people will not experience that full increase.  Indeed, some may see no increase at all.  That is because of rising health care costs. Most people with Medicare who receive monthly Social Security benefits have their Medicare Part B premiums deducted directly from those Social Security payments.  For these people, Congress has provided that the annual increase in the Medicare Part B premium must be no larger than the Social Security cost-of-living adjustment. But it can be as large. They can’t go below zero and lose some of their Social Security benefits, but they can certainly see their cost-of-living adjustment go completely to rising health care costs.

    It is long past time to enact a more accurate cost-of-living adjustment for Social Security. More than three decades ago, in 1987, Congress directed the Bureau of Labor Statistics to develop a cost-of-living increase that measured inflation experienced by older adults. The Bureau complied and now each year publishes the Consumer Price Index for the Elderly, or the CPI-E. Congress should complete what it started and enact legislation that utilizes the CPI-E to adjust Social Security’s benefits.

    Fortunately, Democrats are squarely in favor of this change. Bills authored and co-sponsored by Democrats in both the House of Representatives and the Senate have been introduced that do just that. Indeed, one of those bills, the Social Security 2100 Act, authored by Rep. John Larson (D-CT), the chairman of the House Social Security Subcommittee, and cosponsored by 210 of his Democratic colleagues, is likely to be voted out of the House this fall. The bill also expands benefits across the board, while ensuring that all benefits can be paid in full and on time through the year 2100 and beyond.

    And they should go one big step more. A solid majority of House Democrats support improving Medicare and extending it to everyone. They should pass that legislation, as well.

    After a lifetime of work, Americans should have enough guaranteed Social Security to maintain their standards of living. And they should have expanded Medicare so no one is one illness away from bankruptcy.

    The good news is that Social Security beneficiaries will receive a cost-of-living increase this January, small though it will be. The better news is that Democrats are fully behind not only improving the cost-of-living adjustment, but also expanding Social Security and Medicare. When that happens, all of us will be able to keep our heads well above water.

    Here’s more from Just Care:

  • What Trump will do about Part B drug prices

    What Trump will do about Part B drug prices

    A new report by ASPE (Assistant Secretary for Evaluation and Planning), a research arm of the US Department of Health and Human Services, confirms that US drug prices for some of the physician-administered drugs covered under Medicare Part B are almost double the prices in other wealthy countries. To date, there is no bill in Congress to do anything about it. And, there is no evidence that President Trump will do anything meaningful about these high prices in his executive capacity, notwithstanding his claims to the contrary.

    The ASPE report explores some of the drivers of high physician-administered (non-retail) drug spending under Part B. Non-retail drug spending for each Medicare enrollee increased 7 percent a year in the five years between 2006 and 2011 and 11 percent a year in the five years between 2011 and 2016. One driver of high non-retail drug spending is that physicians have a financial incentive to administer costlier drugs, as they earn 6 percent of the cost of the drugs they administer.

    Price is another driver of high drug spending. The researchers find that Medicare pays on average 1.8 times more for these non-retail drugs than peer countries. Medicare does not use a formulary as a tool to limit coverage and rein in the price of non-retail drugs. Other countries often rely on a formulary to keep their drug spending in check.

    ASPE compared drug prices for 27 non-retail drugs on which Medicare spends the most. And, it looked at their prices in 17 countries, including the US.

    President Trump claims that he wants to bring these Medicare Part B drug prices down to a level similar to what peer countries pay, sometimes called international reference pricing. If he actually were to do so, it could be a small step forward. But, his proposal leaves one wondering why he is not addressing drug prices under the Part D prescription drug benefit, where drug spending is far higher.

    Moreover, there is no reason to believe Part B drug prices will come down under Trump’s proposed plan, given that he has made all kinds of claims about reining in prescription drug prices, none of which have come to pass.

    Even if Trump’s international reference pricing proposal were implemented, it would likely make no difference on overall drug spending, which in 2017 totaled $489 billion, or reduce out-of-pocket costs for people with Medicare. The administration is claiming a savings of $17.2 billion over 5 years, less than $3.5 billion a year. That represents less than 1.0% of the drug industry’s revenues in 2017.

    It is also easy to imagine that pharmaceutical companies will raise their prices higher elsewhere or otherwise game the system to ensure their profits remain intact. Axios reports that investors are not worried that Trump’s plan will have any effect. The Nasdaq’s Biotechnology Index was up 1.75% after Trump’s announcement.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • What’s the Medicare premium in 2019?

    What’s the Medicare premium in 2019?

    The 2019 standard monthly Medicare Part B premium, which covers physician services and other medical and outpatient care, will increase from $134.00 to $135.50, up $1.50 a month for people with incomes of $85,000 or less. But, many people with Medicare have been paying less than the standard premium. In 2019, these people may see a $5.50 increase in their Part B premiums.

    A “hold harmless” provision in the Social Security Act protects people from paying more in Medicare premiums than the increase in their Social Security monthly benefits from one year to the next. Because Social Security benefits have not increased as fast as the standard Medicare Part B premium, many people with Medicare have not been paying the standard premium. But, Social Security checks are projected to rise by 2.8 percent in 2019. So, people who now pay about $130 a month for the Medicare Part B premium because of the hold harmless provision may no longer be protected from paying the full standard monthly Part B premium.

    Since Social Security benefits are increasing 2.8 percent on average in 2019, an average of $39 a month, Medicare monthly premiums can increase up to 2.8 percent –$135.5o a month maximum–for everyone with Medicare who had been protected by the “hold harmless” provision. Put differently, the majority of people who had been paying less than the standard Part B Medicare premium will see their monthly Part B premium rise more than $1.50; but, for most people, their monthly Social Security check, even after the Medicare premium is deducted, should be at least $30 higher than in 2018.

    In 2019, people whose modified adjusted gross income from two years ago as reported on their federal tax return–about six percent of the Medicare population–pay:

    • $189.60 a month, if their income is above $85,000 and no more than $107,000 ($2.10 increase from 2018)
    • $270.90 a month, if their income is above $107,000 and no more than $133,500 ($3.00 increase from 2018)
    • $352.20 a month, if their income is above $133,500 and no more than $160,000 ($3,90 increase from 2018)
    • $433.40 a month, if their income is above $160,000 and less than $500,000 ($4.40 increase from 2018)
    • $460.50 a month, if their income is above $500,000 ($27.10 increase from 2018)

    To arrive at the premium amount for married people filing a joint tax return, double the income.

    The 2019 Part B annual deductible is $185, up $2.00 from 2018.

    People with incomes up to 135 percent of the federal poverty level, ($1,386 in monthly income for an individual and $1,872 for a couple in 2018; these amounts may increase in 2019) are eligible for help paying their premiums through Medicaid or a Medicare Savings Program.

    For more than four decades, the Medicare Part B premium (medical insurance) was the same for everyone regardless of income, geography or health status, a quarter of the cost of Part B services. (Medicare Part A, hospital insurance, is premium-free if you have contributed into Social Security for at least 40 quarters.)  In 2007, wealthier people with Medicare began paying higher premiums.

    Here are 2019 Medicare Part A costs:

    • The Part A hospital deductible is $1,364 and coinsurance for hospitalizations after day 60 is $341 a day in a benefit period; coinsurance for lifetime reserve days  is $682 a day.
    • The Part A daily coinsurance for skilled nursing facility stays after day 20 is $170.50.

    Here’s more from Just Care:

  • 2019 Social Security benefits should rise, but checks may not

    2019 Social Security benefits should rise, but checks may not

    As a result of inflation, people on fixed incomes find that their incomes decline in value over time.  One extremely important feature of Social Security is that its benefits are adjusted every year automatically to offset increases in inflation, so that the modest, but vital, benefits do not erode over time.  It is important to understand that these adjustments are not increases.  They are intended to simply allow people to tread water, to maintain their purchasing power.

    Unfortunately, the government’s cost of living adjustment for Social Security is based on inflation experienced by workers and not by retirees and people with disabilities who are unable to work. Older people and people with disabilities have, on average, higher health care costs; those costs tend to rise considerably faster than overall inflation.  For that and other reasons, Social Security beneficiaries generally experience higher costs of living than workers, so Social Security adjustments are often inappropriately low.  Consequently, Social Security beneficiaries are not even treading water, but rather losing ground. Nevertheless, even inadequate adjustments are better than none.

    The actual adjustment is not calculated until October, because it is based on the inflation rate of the third quarter of this year, which ends September 30, over the third quarter of last year.  Nevertheless, Social Security’s actuaries project at the end of each year their best estimate of what it will be.  For 2019, they have projected a cost of living adjustment of 2.4 percent, an average of about $32 more each month.  In recent months, though, the rate of inflation has increased, mainly as the result of increased oil prices.  Consequently, it looks like the adjustment might be higher than 2.5 percent – perhaps even as high as 3 percent.

    That is good news for Social Security beneficiaries, many of whom have little or no other income.  The bad news is that millions of people likely will not experience that full increase; some may not see any increase at all and others might see a decline in their overall income, as the result of rising health care costs.

    Most people with Medicare who receive monthly Social Security benefits have their Medicare Part B premiums deducted directly from those Social Security payments.  For these people, Congress has provided that the annual increase in the Medicare Part B premium must be no larger than the Social Security cost of living adjustment.

    So, they can’t go below zero, and lose some of their Social Security benefits, but they can certainly see their cost of living adjustment go completely to health care costs.  For those who do not have their Medicare premiums deducted automatically from their Social Security benefits, they can, indeed, lose even more ground.

    According to the most recent Medicare Trustees Report, average costs for Medicare Part B, the part covering doctors’ bills, is estimated to increase by $327 in 2019.  The average cost for Medicare Part D, insurance for prescription drug costs, is estimated to increase by $63.  That is a total increase of $390.  For those receiving a Social Security benefit of $15,000 – and tens of millions receive less than that — the adjustment will only add $375, if the 2019 Social Security adjustment is 2.5 percent.

    This is unacceptable.  After a lifetime of work, Americans should have enough guaranteed Social Security to maintain their standards of living.  The solution is three-fold. First, Congress should enact a better, more accurate measure of inflation for people receiving Social Security benefits. In addition, benefits, which are modest, but vital, should be increased. Finally, Congress should improve Medicare by expanding it to cover such vital services as hearing aids, dental work, and vision care.  Premiums, co-pays, and deductibles should be eliminated.  And everyone should be covered.  Improved Medicare for All will improve the nation’s health outcomes while costing a fraction of what we pay today.

    It is long past time to enact a more accurate cost of living adjustment for Social Security, expand its benefits, improve Medicare, and extend it to everyone.  That is profoundly wise policy.  It also represents the views of the vast majority of us.

    If you want Congress to expand Social Security, please sign this petition.

    Here’s more from Just Care: