March 14, 2016– Even
though inflation was too low for a cost – of – living adjustment (COLA) this
year, a number of crucial items that older consumers typically buy jumped in
cost, according to a new chart released today by The Senior Citizens League (TSCL).
“These cost increases are forcing older consumers to make difficult choices,”
says TSCL Chairman, Ed Cates.
“In the years when
Social Security benefits don’t keep up with rising costs, people living on
fixed incomes are forced to spend retirement savings faster than planned or
worse, go into debt, just to make ends meet,” says Cates.
The following chart illustrates ten of the biggest cost
increases over the past year in items most likely to be found in a typical
retiree’s household budget.
“While the majority of Medicare beneficiaries did NOT have an
increase in their Medicare Part B premiums this year, about one – third pay 16
percent more in premiums than they paid last year — one of the biggest
increases in Medicare premiums on record,” Cates says.
“This especially affects people who have delayed the start of
their Social Security benefits and pay for their Medicare by check,” Cates
explains. Over time however, TSCL studies indicate that Medicare Part B premium,
increases are one of the top fastest – growing costs during most retirement
years.
Prescription drug costs are another category that TSCL is
receiving a lot of comments about from people age 60 and over.
“There have been several back – to – back years recently of
extreme prescription drug price spikes,” Cates says. TSCL used data from
Truveris, a healthcare data company that tracks thousands of drug prices, which
showed that prescription drug prices rose 10.43 percent in 2015. TSCL supports
legislation that would allow Medicare greater authority to negotiate drug
prices.
The cost of eating a more healthy diet rose while the cost of
foods higher in fat and cholesterol like processed meats and cheese
tumbled. The cost of a pound of tomatoes rose 8.1 percent, almost as much
as the average increase in prescription medicines.
Although the cost increase of doctor visits was one of the
slower growing increases at 2.3 percent, the price of veterinarian care for
pets rose 4.1 percent, nearly double the rate of physician costs.
TSCL believes that’s due to the effect of insurers negotiating
discounts from doctors for human care. But the same is not so much the
case with pet medical care because most people don’t have insurance for the
pets.
“The takeaway is that, although the huge drop in fuel oil
costs is only one area of spending, it’s big enough to drive down the COLA —
even though older Americans drive less as they get older,” Cates says.
Research for TSCL indicates that using a seniors CPI — like the Consumer Price
Index for the Elderly (CPI-E) — would pay a higher COLA in most years, even in
2016. TSCL is lobbying for an Emergency COLA, as well as legislation that
would pay a more fair and accurate COLA by switching to the CPI-E.
How are you affected by rising costs? Take TSCL’s annual Senior
Survey— visit www.SeniorsLeague.org.
