There’s some good news today from the Social Security Administration: After two years of no cost of living adjustment (COLA), there will be a cost of living increase of 3.6 percent for 2012. But because health care costs are rising even faster than overall inflation, the increase is less than it first appears, especially for women.

Medicare premiums are deducted from Social Security, and they’re rising too. The increase in Medicare premiums will eat up much of the increase from the COLA, especially for those with modest benefits, who are disproportionately women. (However, the poorest beneficiaries – also mostly women – will be protected from the increased premiums because Medicaid pays their Medicare premiums.)

Rapid medical inflation also means increased out-of-pocket health costs. Because women face higher out-of-pocket medical costs than men and have lower incomes, rapid medical inflation hurts them even more.

Even with the COLA announced today, beneficiaries – especially women – won’t have much left over to meet increased food, energy, and other expenses than health care. That’s because the measure of inflation used to calculate the current COLA doesn’t take account of the fact that elderly people and people with disabilities spend a much larger share of their budgets on health care, where costs rise far more quickly than for other goods and services. Yet the super-committee on deficit reduction is reportedly considering proposing a change in the way the COLA is calculated – changing to the chained-CPI – that would reduce the annual COLA. This change would make the COLA an even less accurate and less adequate measure of inflation for recipients of Social Security and Supplemental Security Income, who are overwhelmingly elderly people and people with disabilities. The cuts from the chained CPI would grow deeper every year an individual receives benefits. And the change would especially hurt women because they live longer than men, rely more on income from Social Security, and are already more likely to be poor.

The COLA announced today will provide some help. It may allow some beneficiaries living on Social Security to “splurge” once in a while on a small piece of meat on sale to vary a diet of thin slices of discount cheese. But many will still need to watch their pennies—and the super-committee.

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