{"id":11954,"date":"2017-03-02T20:29:13","date_gmt":"2017-03-02T20:29:13","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2017\/03\/02\/new-bill-looks-to-fix-cola-gap-with-elderly-index\/"},"modified":"2026-08-08T04:33:30","modified_gmt":"2026-08-08T04:33:30","slug":"new-bill-looks-to-fix-cola-gap-with-elderly-index","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/management\/2017\/03\/02\/new-bill-looks-to-fix-cola-gap-with-elderly-index\/","title":{"rendered":"New bill looks to fix COLA gap with elderly index"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">For the past two years, federal retirees have cautiously watched the cost-of-living-adjustment rates to see whether their rise, or lack thereof, would mean a staggering price tag for Medicare benefits.<br\/><br\/>But a new bill from Rep. John Garamendi, D-Calif., aims to end the near-annual cliffhanger by shifting the COLA from one Consumer Price Index and onto another.<br\/><br\/>Garamendi introduced HR 1251 \u2014 or the <a href=\"https:\/\/www.congress.gov\/bill\/115th-congress\/house-bill\/1251\/actions?q=%7B%22search%22%3A%5B%22H.R.+1251%22%5D%7D&amp;r=1\" target=\"_blank\" title=\"Link: https:\/\/www.congress.gov\/bill\/115th-congress\/house-bill\/1251\/actions?q=%7B%22search%22%3A%5B%22H.R.+1251%22%5D%7D&amp;r=1\">CPI-E Act of 2017<\/a>\u00a0\u2014 on Feb. 28 with the goal of changing the formula used to calculate the COLA rates from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the CPI for the elderly, or CPI-E.<br\/><br\/>The COLA determines how much select retirees \u2014 including many former federal employees \u2014 will be able to offset the rise in their Medicare premiums.<br\/><br\/>COLA increases are determined, in part, by the\u00a0CPI-W, which determines the price of goods and services by urban wage earners and clerical\u00a0workers.\u00a0The COLA level increases if the third quarter CPI-W numbers are more than the previous year&#8217;s numbers. If the CPI-W remains at or below the previous year, the COLA benefit remains the same.\u00a0<br\/><br\/><\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">But in the past two years, the COLA has been lukewarm at best. In 2015, the COLA came in low, but retirees were spared a potential 50 percent hike by the Boehner budget deal, which capped Medicare Part B premiums and extended a no-COLA protection through 2017.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But in 2016, the premium protections were circumvented by a small COLA increase that resulted in a 42 percent spike in Medicare premiums.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">As a result, for beneficiaries who are receiving Social Security benefits, there\u2019s a provision called &#8220;hold harmless&#8221; that allows them to cap their premium increase. <a href=\"http:\/\/www.federaltimes.com\/story\/government\/management\/2015\/11\/03\/federal-health-care-premiums-will-rise-far-worse\/75100104\/\"><\/a>The hold harmless provision lets these beneficiaries deduct increased health care costs directly from Social Security, allowing the remaining premium to stay lower.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The remaining 30 percent of Medicare Part B beneficiaries not covered by hold harmless \u2014 an estimated 16 million retirees \u2014 have to pick up the slack, meaning their premiums would rise.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Garamendi\u2019s bill would move the COLA formula to the CPI-E index, which measures the cost of goods and services for &#8220;households whose reference person or spouse is 62 years of age or older.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From 1982 to 2011, the CPI-E has outpaced the CPI-W 3.1 percent to 2.9 percent, mostly, <a href=\"https:\/\/www.bls.gov\/opub\/ted\/2012\/ted_20120302.htm\" target=\"_blank\" title=\"Link: https:\/\/www.bls.gov\/opub\/ted\/2012\/ted_20120302.htm\"> the Bureau of Labor Statistics said<\/a>, because of higher inflation costs for older Americans, especially when it comes to medical and housing spending.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Garamendi said that shifting COLA calculations to the CPI-E better reflects the spending habits of the people affected by increases than those covered in the CPI-W.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;Our senior and disabled citizens rely on Social Security benefits for a large portion of their income, and it\u2019s about time for Social Security benefits to reflect their lifestyles,&#8221;\u00a0said Garamendi in a statement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;Using a Consumer Price Index that actually reflects how retirees spend their money\u00a0\u2014\u00a0especially in health care\u00a0\u2014\u00a0is a no-brainer that will increase benefits and make Social Security work better for the people it serves.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The bill has the support of the National Active and Retired Federal Employees Association, which has continued to lobby for hold harmless provision reform.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New legislation aims to end the COLA cliffhanger by shifting it from one price index to another.<\/p>\n","protected":false},"author":7,"featured_media":37568,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":15,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[15,69],"tags":[],"coauthors":[2714],"class_list":["post-11954","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management","category-pay-benefits"],"acf":{"subheadline":"","legacy_arc_id":"JP3CAESHSZF5DHYQODWWHLQUTE","arc_canonical_url":"\/management\/2017\/03\/02\/new-bill-looks-to-fix-cola-gap-with-elderly-index\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>New bill looks to fix COLA gap with elderly index - Federal Times<\/title>\n<meta name=\"description\" content=\"New legislation aims to end the COLA cliffhanger by shifting it from one price index to another.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New bill looks to fix COLA gap with elderly index\" \/>\n<meta property=\"og:description\" content=\"New legislation aims to end the COLA cliffhanger by shifting it from one price index to another.\" \/>\n<meta property=\"og:url\" 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