Many Medicare beneficiaries face sharply higher premiums next year while receiving no cost-of-living (COLA) increase in their Social Security checks. AARP wants Congress to do something about it.
In a letter to all members of Congress, AARP asks that Congress “reduce...the impact of the sudden, sharp increases in the Part B premiums and deductible as soon as possible. Ideally, all Medicare beneficiaries should be held-harmless in the face of no Social Security COLA adjustment.”
The letter notes that 16.5 million Americans face sharp premium increases and that “all Medicare beneficiaries will see their Part B deductible increase 52 percent…from $147 to $223.”
AARP also reiterated its opposition to the Chained Consumer Price Index (CPI), an alternative to the current CPI, which some say understates inflation by relying too heavily on energy costs.
The Chained CPI, favored by many conservatives, seeks to eliminate what is called "substitution bias," an economic theory that holds that when the price of apples goes up, consumers buy oranges.
Proponents say it is a more accurate method of measuring inflation but AARP says the "Social Security COLA would be even more inaccurate and benefits would be even less adequate if recent proposals to adopt a Chained CPI had been enacted."
"AARP has opposed all attempts to enact a Chained CPI, and will continue to do so, because the Chained CPI would further underreport inflation experienced by Social Security beneficiaries, and further erode their standard of living, cutting an estimated $127 billion in Social Security benefits from current and near retirees in the next ten years alone,” the seniors organization said in its letter.
The Chained CPI issue was debated in Congress earlier this year, drawing vehement opposition from many Democrats and from one independent, namely Sen. Bernie Sanders (I-Vt.), currently seeking the Democratic Presidential nomination.
Sanders, speaking in January, said that U.S. middle class incomes are declining while the wealthiest Americans and corporations are getting richer. He believes that any "serious" fiscal proposals should cut tax loopholes for corporations and the wealthiest Americans, prevent massive cost overruns by defense contractors, and raise the minimum wage.
"When we look at America, we have to understand that we have an obscene level of income and wealth inequality," Sanders said.