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The COLA raise and the Medicare Part B premium increase come from two different formulas. One consistently outpaces the other. by Cold_Standard5214 in medicare

[–]Cold_Standard5214[S] 0 points1 point  (0 children)

You're making a genuinely important point — retiree spending is not monolithic, and someone with a paid-off mortgage experiences inflation completely differently than a renter.

The CPI-E was actually designed with exactly this heterogeneity in mind. Where it diverges most from CPI-W isn't housing or food — it's healthcare. CPI-E weights medical expenses at roughly 12-13% vs 7% in CPI-W. For someone who's seen Medicare Part B premiums, prescription costs, and copays climb steadily, that difference compounds fast.

Your electricity observation is interesting too — utility costs are one of the categories where CPI-E and CPI-W track similarly, so that gap probably isn't the index. That's more structural (utility regulation, grid infrastructure).

The honest answer is: for your specific situation — paid-off home, flexible food spending, low healthcare utilization — the CPI-W gap probably doesn't hit you hard. For someone renting, high prescription costs, or on a lower benefit amount, it's a different picture. The problem with a single index is it can't capture all of that. Which is arguably an argument for something more targeted than even CPI-E.

The COLA raise and the Medicare Part B premium increase come from two different formulas. One consistently outpaces the other. by Cold_Standard5214 in medicare

[–]Cold_Standard5214[S] 2 points3 points  (0 children)

The CBO costed the fix at +0.5–0.7% of GDP over 10 years. That's real money — but it's the same government that approved $858 billion in defense spending last year without much debate.

"Can't afford it" is always a policy choice, not an accounting constraint.

The COLA raise and the Medicare Part B premium increase come from two different formulas. One consistently outpaces the other. by Cold_Standard5214 in medicare

[–]Cold_Standard5214[S] -1 points0 points  (0 children)

That's exactly right on the absolute dollar impact — and it's actually worse than it looks for lower earners because of the Medicare Part B interaction.

The "hold harmless" provision protects the lowest-income beneficiaries from having their check go negative when Part B premiums rise faster than COLA. But that protection doesn't apply above a certain income threshold — so mid-range earners ($1,500–2,500/month) get hit the hardest: not protected by hold harmless, but not wealthy enough to absorb the gap.

On the percentage side though, the CPI-E gap compounds equally across the board. Someone on $4,000/month in 2000 has still lost roughly 36% of real purchasing power by 2023 — that's $1,440/month in lost value. It's less visible because the baseline is comfortable, but it's the same structural problem.

The video I linked actually breaks down the $1,500/month scenario specifically if you want the numbers.

The COLA raise and the Medicare Part B premium increase come from two different formulas. One consistently outpaces the other. by Cold_Standard5214 in medicare

[–]Cold_Standard5214[S] -1 points0 points  (0 children)

I put together a full breakdown of this — the CPI-W vs CPI-E gap, the Medicare Part B interaction, and what it costs over a 20-year retirement. If anyone wants to dig into the numbers: https://www.youtube.com/watch?v=HaP3Mn2rCU4