As the third quarter of the year approaches, Social Security recipients are already aware that there will not be an increase of benefits. The purpose of the cost-of-living adjustment, or COLA, is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA.

Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation. This needs to change! The present formula is based primarily, if not solely, on fluctuations of the economy and does not reflect the bigger picture. For example, items like gas prices are factored in when determining COLA. What hasn’t been is the rising cost of health care. Being able to drive to the doctor’s office or pharmacist more than once on a tank of gas is not a benefit!

Aetna reports that those consumers with health care coverage experienced a 7.2 percent increase in their share of health care costs between 2011 and 2012. Health care costs for American families in 2012 exceeded $20,000 for the first time, Aetna said. Provider prices and hospital cost increases are the largest culprits contributing to cost. Running close behind and gaining ground is population age. Individuals who are age 65 or older, who spend much more on health care services than younger people, will comprise nearly one-fifth of the population by 2050. Health care spending in the United States is expected to reach $4.8 trillion in 2021, up from $2.6 trillion in 2010 and $75 billion in 1970. To put it in context, this means that health care spending will account for nearly 20 percent of gross domestic product, or one-fifth of the U.S. economy, by 2021.

These statistics are staggering and question begs to be answered. Why are they being ignored when calculating COLA? It’s obvious the government’s focus is a bit skewed and created a blur to Social Security recipients leaving them blind with nowhere to go and no one to turn to. The controlling forces of how raises are decided needs to be revised and immediately if not sooner.

Stephen Signor
Windham