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Survey says Social Security cost of living adjustment a top issue facing seniors

In a poll of 522 seniors, they ranked the need for a fair Social Security Cost of Living Adjustment (COLA), the small annual increase they receive each year to keep up with inflation, as the most important issue they face. The poll has a margin of error of ±4 percent.

Seniors ranked the need for a fair annual COLA above other high-profile issues facing the elderly, such as the Medicare prescription drug benefit plan, the importation of prescription drugs from other countries, and overall Social Security reform.

When asked to rate how important a fair Social Security COLA was on a 10-point scale, respondents scored it an average of 9.7, with 84 percent of respondents rating it a 10.

In contrast, when asked to rate the importance of a Medicare prescription drug benefit plan (a subject much in the news during the polling period due to the mid-May enrollment deadline for Medicare Part D), seniors scored it an average of 8.4, with only 59 percent rating it a 10. Importing prescription drugs fared even worse, with only 31 percent rating it a 10.

How important are each of these issues to you? 

 

 

Please rate each on a scale of 1 to 10.	1 Not at all important	2	3	4	5	6	7	8	9	10 Extremely important	Total	Average rating (1=not at all important, 10=extremely important)
Medicare prescription drug benefit plan	4%	2%	1%	2%	6%	4%	6%	8%	9%	59%	100%	8.4
Social security 'notch' reform	4%	1%	1%	2%	6%	4%	5%	8%	8%	59%	100%	8.4
Fair social security cost of living allowance	0%	0%	0%	0%	1%	1%	1%	5%	7%	84%	100%	9.7
Social security reform & protecting benefits	1%	0%	0%	0%	1%	1%	1%	7%	8%	81%	100%	9.6
Importation of prescription drugs from other countries	12%	3%	2%	4%	10%	8%	9%	13%	8%	31%	100%	6.9

"Although these polling results come as a bit of a surprise, the fact is that the Social Security Cost of Living Adjustment is no longer being faithful to its original purpose by helping seniors keep up with inflation," said Ralph McCutchen, Chairman of TREA Senior Citizens League. "Over the past five years, the COLA has averaged just under 2.6 percent per year – but with Medicare premiums, home energy bills and gas prices all soaring by double digits each year, how are seniors supposed to keep pace?"

Each year, the government calculates the amount of the increase to the Social Security COLA based on changes to a Consumer Price Index (CPI). But the CPI used to calculate the COLA increase is based on the spending habits of young, urban workers – a group of people who don't spend a large percentage of their income on medications, physician visits and health care.

There is a different CPI, known as the CPI-E, or Consumer Price Index for Elderly Consumers, which more accurately tracks the spending patterns of elderly consumers. If the government used this index to increase the COLA each year, seniors would see some much-needed relief.

For example, a senior who retired in 1984 with an average benefit of $460 per month would have received a total payout of close to $9,500 more over the past 22 years under the CPI-E. There is currently legislation pending on Capitol Hill to implement the CPI-E. More than 100 members of Congress have signed onto H.R. 3601, known as "The Consumer Price Index for Elderly Consumers Act."

Methodology: This poll was conducted by regular mail between April – July, 2006, and was sent to a random sample of 2,000 TREA Senior Citizen League members. Members returned 522 surveys. The results have a four-point margin of error. Data collection, tabulation and verification by the National Research Center of Boulder, CO.