Not long after Mary Callahan’s 1.5 percent Social Security cost-of-living adjustment went into effect Jan. 1 – netting her $20 more a month – a community newsletter arrived in the mail at her modest Neville Island, Pa., home.
Beginning this year, it said, her sewage rates would go up 17 percent, with 11 percent additional increases each of the following three years.
This bit of news followed the four months that Callahan had spent digging out of the Medicare Part D “doughnut hole” – the no-man’s land in which beneficiaries pay the full cost for prescriptions after they have used up their basic benefit and before they reach an upper “catastrophic” mark when coverage resumes.
Under the federal Affordable Care Act, the doughnut hole is slowly shrinking until it is scheduled to disappear completely in 2020. At age 86, Callahan doesn’t know if she’ll be able to take advantage of that, although she says, “I’m expecting to be around for a while.”
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She does know that once she hit the doughnut hole last August, the cost of inhalers she needs every month went from $40 apiece to $380. “After that, I become a beggar. I go to my doctor, my cardiologist, my pulmonologist and I ask for samples. But I never get all the way there.”
For the year, her out-of-pocket expense for medications amounted to $1,234.69.
The tragedy is not that Callahan’s struggle to meet daily expenses with minimal annual raises from Social Security is so unusual. It’s that it may be so common.
The 1.5 percent Social Security increase this year followed raises of 1.7 percent in 2013 and 3.6 percent in 2012.
There was no increase at all in either 2011 or 2010.
“We are hearing from members that they are struggling,” said Ray Landis, advocacy manager for Pennsylvania AARP.
Part of the problem, he said, is that the cost-of-living adjustment, known as the COLA, is based on a market basket of goods that does not always reflect what seniors spend their money on.
“They spend on health care costs more than anything,” he said. “You tack on utility cost increases and just the everyday cost of food, and seniors are falling behind.”
He added: “There’s such a debate about the future of Social Security that we believe the inadequacy of the COLA sort of gets lost.”
Social Security Administration spokeswoman Kia Anderson said the COLA is based on changes in the Consumer Price Index as determined by the Bureau of Labor and Statistics at the Department of Labor.
The nonprofit National Council on Aging estimates more than 23 million seniors 60 and older live on less than $29,000 a year.