Rising medical costs may outpace a Social Security cost-of-living raise next year
Rising medical costs may outpace a Social Security cost-of-living raise next year
Social Security benefits will rise 2 percent in 2018 for approximately 61 million older Americans who rely on the benefit. The annual cost-of-living adjustment is based on the third-quarter Consumer Price Index for urban wage earners and clerical workers. The COLA hasn’t been as high as 2 percent since 2011; it rose 0.3 percent this year and didn’t increase at all in 2016. Low inflation in recent years has helped seniors financially, since many are on fixed incomes. But the rate of inflation in the health care sector has exceeded overall consumer price inflation in recent years. And that’s a challenge for older Americans, who typically spend a greater percentage of their annual budget on health care than younger people. Annual CPI calculations may also fail to capture a significant driver of health care inflation — the introduction of new, high-priced drugs, medical devices and procedures that can’t easily be compared to a similar health care expenditure in the previous year’s CPI data.
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