NARFE: 2021 COLA Doesn’t Keep Pace With Rising Health Care Costs

October 13, 2020

Alexandria, Va. – In response to the 2021 cost-of-living adjustment (COLA) for federal retirement annuities and Social Security benefits announced today pursuant to data published by the Bureau of Labor Statistics, NARFE National President Ken Thomas issued the following statement:

“The 2021 COLA of 1.3 percent, the lowest in four years, is an affront to the millions of federal retirees who devoted their working lives to serving the public.

“This insufficient COLA fails to keep up with inflation experienced by seniors, further eroding their purchasing power. The cost of health care continues to rise faster than other goods. Seniors spend more on health care than any other segment of the population—just as the nation struggles to contain a virus that poses particular danger to older Americans. And federal retirees will almost certainly be further burdened by significantly higher Federal Employees Health Benefits (FEHB) program premiums, which have yet to be announced for 2021.

“This didn’t need to happen. For years, NARFE has urged Congress to address the inequity of COLAs that don’t keep up with rising health care costs by passing legislation requiring the BLS to calculate COLAs based on the consumer price index for the elderly (CPI-E) instead of the consumer price index for workers (CPI-W).

“The 116th Congress has failed to act on this crucial move, and time is running out. I urge the next Congress to correct the longstanding injustice that penalizes retirees for how they spend their limited funds.”

Background:

  • COLAs were 2.0 percent in 2018, 2.8 percent in 2019 and 1.6 percent in 2020.
  • Presently, COLAs are based on the consumer price index for workers (CPI-W), a measurement of how urban wage earners and clerical workers under the age of 62 spend their money. Yet, since 1982, the BLS has calculated the CPI-E, which specifically measures prices experienced by those 62 years of age and older.
  • For years, the CPI-E has demonstrated that prices increase for seniors by at least 0.2 percent more, on average, than for the population measured by the CPI-W.
  • Introduced in early 2019, H.R. 1533, the Fair COLAs for Seniors Act, would require COLAs for federal retirement annuities and Social Security benefits, as well as for military retirement and veterans’ benefits, to be based on the CPI-E, instead of the CPI-W. Unfortunately, this proposed legislation has not been considered by any of the four House committees with jurisdiction over it.

CONTACT:

Jenn Rafael
NARFE Director of Communications and Marketing
jrafael@narfe.org
(571) 483-1270

National Active and Retired

FEDERAL EMPLOYEES Association

NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.

NARFE: 2021 COLA Doesn’t Keep Pace With Rising Health Care Costs

October 13, 2020

Alexandria, Va. – In response to the 2021 cost-of-living adjustment (COLA) for federal retirement annuities and Social Security benefits announced today pursuant to data published by the Bureau of Labor Statistics, NARFE National President Ken Thomas issued the following statement:

“The 2021 COLA of 1.3 percent, the lowest in four years, is an affront to the millions of federal retirees who devoted their working lives to serving the public.

“This insufficient COLA fails to keep up with inflation experienced by seniors, further eroding their purchasing power. The cost of health care continues to rise faster than other goods. Seniors spend more on health care than any other segment of the population—just as the nation struggles to contain a virus that poses particular danger to older Americans. And federal retirees will almost certainly be further burdened by significantly higher Federal Employees Health Benefits (FEHB) program premiums, which have yet to be announced for 2021.

“This didn’t need to happen. For years, NARFE has urged Congress to address the inequity of COLAs that don’t keep up with rising health care costs by passing legislation requiring the BLS to calculate COLAs based on the consumer price index for the elderly (CPI-E) instead of the consumer price index for workers (CPI-W).

“The 116th Congress has failed to act on this crucial move, and time is running out. I urge the next Congress to correct the longstanding injustice that penalizes retirees for how they spend their limited funds.”

Background:

  • COLAs were 2.0 percent in 2018, 2.8 percent in 2019 and 1.6 percent in 2020.
  • Presently, COLAs are based on the consumer price index for workers (CPI-W), a measurement of how urban wage earners and clerical workers under the age of 62 spend their money. Yet, since 1982, the BLS has calculated the CPI-E, which specifically measures prices experienced by those 62 years of age and older.
  • For years, the CPI-E has demonstrated that prices increase for seniors by at least 0.2 percent more, on average, than for the population measured by the CPI-W.
  • Introduced in early 2019, H.R. 1533, the Fair COLAs for Seniors Act, would require COLAs for federal retirement annuities and Social Security benefits, as well as for military retirement and veterans’ benefits, to be based on the CPI-E, instead of the CPI-W. Unfortunately, this proposed legislation has not been considered by any of the four House committees with jurisdiction over it.

CONTACT:

Jenn Rafael
NARFE Director of Communications and Marketing
jrafael@narfe.org
(571) 483-1270



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NARFE (National Active and Retired Federal Employees Association) 606 N. Washington St., Alexandria, VA 22314, Phone: (703) 838-7760, Fax: (703) 838-7785.

 

This is the only website that reflects the official opinions and positions of the National Active and Retired Federal Employees Association (NARFE). Opinions and/or positions that appear on any other site bearing NARFE's name or seal are not necessarily those of NARFE. Click here for Privacy Statement.   NARFE has been certified by Dun & Bradstreet.