Social Security checks will increase next year, but for Lou Scrivani, a 76-year-old former staffing company executive, the increase won’t be enough to cover rising medical costs, let alone other costs that have skyrocketed over the past year. It won’t even cover the cost of living.
Starting in January, more than 66 million beneficiaries of the program will receive a 3.2% cost-of-living adjustment (COLA), averaging more than $50 more each month.
COLA is intended to help Americans keep up with inflation and maintain their standard of living each year. But many seniors say hiking isn’t enough.cost of Items used by the elderly According to the Senior Citizens League, a nonprofit organization for seniors, most of their funding consistently exceeds COLA. The biggest expense is medical expenses.
Mr. Scrivani, who lives in Delaware, said that even with a COLA, “the net benefit is not going to be enough to keep up with current inflation.”
show me the math
Scrivani calculates for himself and his wife:
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Total monthly COLA increase for both: approximately $135.
◾ Monthly increase in Medicare Part B: approximately $10 x 2 = $20
◾ Drug plan increase: $25.70 x 2 = $51.40
◾ Medicare subsidy increase: $10 total
That means Scrivanis gets to keep about $53.60 of the $135 monthly COLA increase. However, their drug deductible increased by $60.
“So, goodbye $53 increase,” Scrivani said. “At the current rate of inflation, we are in negative territory overall.”
And this example only illustrates the increase in medical costs. Experts and seniors say the hemorrhage is made worse when you factor in rising costs for housing, food, gas and utilities, and seniors should expect their savings to cover the difference.
But that doesn’t always happen.
The poverty rate for Americans 65 and older increased for the third consecutive year, from 10.7% in 2021 to 14.1% in 2022, according to the report. Latest Census Bureau data.
“We have a problem and a lot of people are feeling it,” said Chris Whipple, a partner and financial advisor at Christopher Curtis Financial in Nashville, Tennessee. “So I jump to what I can do. What can I do? I plan accordingly.”
Do Americans have enough savings to cover the additional costs each year?
The National Federation of Senior Citizens said more than a quarter of the 1,055 adults surveyed in the first three months of this year said they had maxed out their retirement accounts in the past 12 months. This is an increase from 20% in the second half of last year.
The league also said that despite the spike in interest rates, a record 45% of people said they had carried credit card debt for more than 90 days.
“The biggest concern is that retirement income won’t be enough to cover essential costs for the next few months,” said Mary Johnson, a Social Security and Medicare policy analyst. Federation of the Elderly; said in a statement last month.
Will medical costs become cheaper?
Many of the cost savings from the Inflation Control Act won’t materialize soon.
The only things that went into effect this year were a $35 monthly insulin copay cap and free recommended adult vaccines for Medicare Part D participants.
Price negotiations with drug companies began this year for 10 drugs, but “for all of them, most of the savings, if any, won’t be seen by anyone until around 2026,” Scrivani said. Stated.
Starting January 1, an $8,000 out-of-pocket expense (including certain payments made by other people or entities on your behalf) will automatically qualify you fordevastating news” for the remainder of the calendar year, you do not have to pay copays or coinsurance for drugs covered by Part D.
a Maximum annual out-of-pocket costs for prescription drugs The $2,000 distribution is also not scheduled until 2025.
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What are seniors doing to increase their health care costs?
The cost of medicines is so high that many seniors will order from Canadian pharmacies at a fraction of the price in the United States.
Scrivani takes Charelto to prevent stroke. Taking into account his insurance and copay, a 30-day supply will cost him $550. Using GoodRx, a free online price comparison platform for prescription drugs, he would pay between $528 and $567 depending on the pharmacy, or nearly $7,000 a year out of pocket.
Considering these prices, he began conducting extensive research to find cheaper drugs.of canadian government and the usa Food and Drug Administration has some tips Some people ask us about finding online pharmacies or overseas pharmacies. people’s pharmacy For consumer drug information, check out the Canadian International Pharmacy Association. list of carefully selected pharmacies.
Scrivani said using Canadian pharmacies has significantly reduced costs. His drug is being shipped from Turkey, and this year it will cost $119 a month for a three-month supply, or $49 a month, compared to the $550 a month you can get from a U.S. drug company authorized to sell the drug. It will be available.
“That’s the current state of geriatric care in this country,” he says.
In extreme cases, Whipple said, some people may move to Texas, California or Arizona so they can easily cross the border into Mexico to buy supplies. He and other financial experts understand why people do it, but argue that a better approach is to start working on financial planning early in life.
said Morgan D. Hill, chief executive officer of wealth management firm Hill & Hill Financial. “You have to plan to spend one-third of your income on medical expenses.”
What resources are available now to support older adults as a whole?
If you’re already in the midst of old age, here are some ways to find help.
◾ Use BenefitsCheckUp.org to find local assistance programs for everything from food and medicine to utilities, or call our toll-free helpline at 1-800-794-6559. Monday through Friday, 8 a.m. to 7 p.m. EST.
◾ Click here for Medicare and Medicaid help. state health insurance assistance programs Or call 1-877-839-2675.
◾ If you don’t have a computer or internet access, go to or call your local social services office. Vic Adams, 69, of Saltville, Virginia, was able to get $23 a month from the Supplemental Nutrition Assistance Program (SNAP) by doing so a few months ago. “It’s like milk and bread and maybe 12 eggs,” he said.
Adams, whose wife Cheryl, 64, has cancer, also discovered they were eligible for cancer treatment. limited medicaidHe hopes it will help pay some of his bills this month.
It takes time to apply over the phone, but “I’m lucky.” Of course I can’t go to ball games and I can use hearing aids, but I’m thankful that I have heat and food. We are just old people taking care of each other. ”
Medora Lee is USA TODAY’s money, markets and personal finance reporter. Please contact us at email@example.com. Subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.