Bad News for Fixed-Income Elderly

Everyone knows that cola isn’t particularly good for you. COLA, though, the Cost of Living Adjustment that the Social Security system has made for 38 of the past 40 years, is vital to some 60 million Americans dependent on the system to make ends meet. And so, the federal government’s announcement last week that there will be no COLA modification in 2016 should be of concern to all Americans — and, in particular to members of communities like ours with large numbers of older people on fixed incomes.

Making things even more disturbing is that, due to a quirk in federal law, nearly a third of Medicare beneficiaries could also be facing record increases in their premiums unless Congress intervenes.

The Obama administration is urging the Legislature to stop or limit the health insurance premium increases, which could raise the cost for some Medicare beneficiaries by about 50 percent. But for now, there is no Congressional movement on the issue, because of the leadership crisis in the House of Representatives.

The reason for the lack of a cost of living adjustment for the coming year is that the formula for calculating it, the Consumer Price Index, involves an assortment of consumer cost factors, with gasoline prices and other energy costs prime among them.  The price of gas, in particular, has declined sharply over recent months, down by 30 percent from last year. Airfares have fallen by 5.9 percent and clothing prices are down by 1.3 percent.

But other prices are up. Housing costs, for example, climbed by 3.2 percent, and food prices were 1.6 percent higher. And, of particular pertinence to older Americans, already costly medical care has risen by 2.4 percent.

That decline in gasoline, travel and clothing prices has put more money in many families’ pockets, but older Americans, facing higher costs for health care and other goods and services, do not necessarily enjoy that benefit. As a spokesman for AARP, put it: “People can afford to drive to the drugstore because gas prices are lower, but once they get there, they may not be able to afford their prescriptions.”

And while some Medicare beneficiaries will be protected against higher premiums in 2016 by a “hold harmless” provision that limits any increases in Medicare premiums to increases in individuals’ Social Security benefits, many will not.

The American Jewish community may be youth-heavy but it is nevertheless blessed, baruch Hashem, with many members who are advanced in years. The absolute number of elderly Jews more than doubled from 1957 to 2000, reaching more than a million persons. 65,000 Jewish seniors in the eight-county New York area live alone, and are often in need of medical services. Health costs have been rising, driven in part by new technologies and costly prescription drugs; and many retirees are making do only with the help of the social safety net.

We agree with Representative Eliot Engel that “The government needs a new approach — one that recognizes the reality of rising costs in many areas, especially health care, that are putting pressure on American seniors.”

Mr. Engel has introduced a bill to amend current law by requiring the use of a new cost-of-living barometer, the “Consumer Price Index for the Elderly,” for calculating annual cost of living adjustments for people on Social Security.

We beseech Hashem, “Do not forsake me in the time of old age” (Tehillim 71:9). A civilized society sees a mandate in that plea, and sees to it that its elders are adequately provided for.

Much of the world regards the aged as a mere burden. Our community, though, recognizes that the elderly among us are a gift, not only a link to an earlier era that we regard with veneration, but as a precious resource in and of themselves. Chazal see in the word zaken, “elder,” an indication of the phrase “zeh kana chachma” — “this one has acquired wisdom.” And so, our responsibility toward the elderly among us is not born only of the fact that they need us. It is born, too, and even more keenly, of the fact that we need, and appreciate, them.

That responsibility extends, of course, to affording our elders the respect due them and to personally providing them with what they need.

But it also extends to advocating on behalf of their economic security in the halls of government.

This article appeared in print on page 10 of the October 19th, 2015 edition of Hamodia.