SOCIAL SECURITY Checks will get increase

Some economists say the increase will not cover higher fuel costs.
WASHINGTON (AP) -- The cost-of-living adjustment intended to help more than 47 million Social Security recipients keep up with inflation is expected to be a tad larger in 2005 than it was this year, but the bad news is that much of the increase will be eaten up by higher Medicare premiums.
The Social Security Administration is announcing the new cost-of-living adjustment, or COLA, today, but in advance of the release, many private economists were predicting a gain of slightly better than 2.5 percent, which would be up from the increase Social Security recipients received at the beginning of this year of 2.1 percent.
Though the new increase will translate into a rise in average monthly benefits of around $20, more than half of that amount will be eaten up by higher Medicare premiums.
Medicare premiums
The government announced last month that Medicare premiums will increase by a record amount in dollar terms of $11.60 per month starting in January, compared with a monthly premium increase of $7.90 this year.
Under law, no Social Security beneficiary will get lower benefits than that person is currently getting even if his Social Security cost-of-living adjustment does not cover the entire cost of the Medicare premium increase.
But advocates for the elderly said that protection still means that millions of Social Security beneficiaries at the low end of the benefit scale will see no gain at all this year because the COLA increase will all be eaten up by the Medicare premium increase.
"That means that many people will have no ability to keep up with inflation," said John Rother, policy director at AARP, formerly the American Association of Retired Persons.
Heating costs
Rother and other private economists said another problem is that the COLA will not cover the big jump in heating costs many Americans are expected to see this winter, reflecting crude oil prices that have climbed to an all-time high above $50 per barrel.