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What fiscal cliff means for Massachusetts seniors


With the Dec. 31 deadline to address expiring tax and spending cuts looming, many people across the nation and here in Massachusetts are left wondering what Washington’s budget debate means for them.

Unfortunately, some in Washington are considering cramming changes to Medicare and Social Security into a year-end budget deal. Today, AARP is providing a breakdown of the impact a shortsighted budget deal could have on the health and retirement security of Bay State seniors and their kids and grandkids.

Social Security by-the-numbers in Massachusetts — What a last-minute budget deal could mean:

In Massachusetts, 819,775 seniors currently receive Social Security for an average annual benefit of $14,200. Social Security makes up about 56 percent of the typical older Bay Stater’s income, lifting 33 percent of these residents out of poverty. In addition, it pumps $15.3 billion into the state economy. Changing the way cost of living adjustments (COLA) are calculated for Social Security beneficiaries by moving to a chained consumer price index, as is on the table in debt deal discussions, cuts benefits, taking roughly $2.39 billion out of the pockets of Massachusetts Social Security beneficiaries over the next 10 years – and $112 billion for beneficiaries nationwide.

“The current Social Security COLA already understates what an average older Massachusetts resident spends and purchases each month,” said Linda F. Fitzgerald, state president of AARP Massachusetts, which serves more than 800,000 members age 50 and older in the commonwealth. “Assuming that most people receiving Social Security, who are already just getting by, will simply ‘trade down’ in their spending on prescription drugs, utilities and other fixed expenses for lower cost options is out of touch with reality. Americans have worked too hard to earn their benefits to end up getting pushed over the edge in a fiscal cliff deal. Social Security is not a cause of the budget deficit and it shouldn’t be used to solve it.”

Medicare by-the-numbers in Massachusetts — What a last-minute budget deal could mean:

Roughly 879,033 older Massachusetts residents are enrolled in Medicare, spending 12 percent, or $5,300 on out-of-pocket medical expenses a year. In 2011, Medicare spent an estimated $9.41billion on health care services in the commonwealth. The move being considered by Congress to raise the eligibility age from 65 to 67 would leave 109,752 Bay Staters without health coverage (based on current beneficiary data), forcing them into the private insurance market, which is estimated to cost them an additional $2,200 per year. And, removing the youngest and healthiest older Americans from the Medicare risk pool will increase premiums for those remaining in the program.

“Raising the Medicare eligibility age would dramatically increase costs for recently retired and soon-to-retire seniors, drive up premiums for those enrolled in Medicare and increase overall health care costs,” adds Fitzgerald. “Seniors deserve guaranteed coverage, not higher costs.”

Fitzgerald concludes, “AARP looks forward to working with legislators on both sides of the aisle on proposals that strengthen Social Security and Medicare for all generations, but not by cramming changes to these vital programs into a last–minute deal that could harm all of us.”

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