DALLAS - Doris Boykin of Dallas says she's an expert at cutting corners: She's careful about what she buys at the grocery. She turns off her window air conditioner more than she'd like. And she delays much-needed home repairs.
But even with all that effort, the retired 84-year-old office manager says, "I'm lucky to have a dollar left at the end of the month."
Boykin's only income is her Social Security check. What especially irks her, she says, is that almost half of the modest increase in her benefits this year - which is meant to cover the increased cost of living - was eaten up by higher Medicare premiums.
"As they say, `Now you see it. Now you don't.'"
Her lament is familiar among many older adults as Medicare premium increases outstrip the annual cost-of-living adjustments for Social Security recipients.
Washington politicians wrangle over how best to respond: Should premium increases be capped? Or is help already on the way in the form of Medicare's new prescription drug benefit, which will help seniors keep more of their cash?
While that debate goes on in the heat of a presidential election year, many Social Security recipients scrimp harder than ever.
Lue Taff, who answers financial questions at the Senior Source of Dallas, says more of her callers say they don't know how they'll pay for necessities with what's left of their Social Security checks after Medicare's share has been deducted.
"It's gotten to be a daily struggle for those with no other source of income," she said.
Medicare's premium for doctors' services increased 13.5 percent this year, while Social Security benefits went up only 2.1 percent.
That means the increase in Medicare premiums consumed almost 40 percent of the cost-of-living increase in the average Social Security check for a retired man, half of the increase in the average check for a retired woman, and more than three-quarters of the increase in the average check for the wife of a retired worker.
"The annual Social Security increase is designed to prevent an erosion in seniors' purchasing power, but it's not keeping pace with rapidly rising health care costs," said Diane Archer, founder of the Medicare Rights Center, a nonprofit advocacy group for Medicare beneficiaries. "Many people already are having trouble paying their Medicare premiums and their uncovered health care costs. And it's only going to get worse."
Next year's increase in Medicare's premium for doctors' services is expected to exceed this year's.
In 2006, older adults will begin to benefit from prescription drug coverage, but they'll pay for it with an additional Medicare premium deducted from their Social Security checks. Experts predict the drug premium will start at about $35 per month and will increase by about 7 percent annually to make up for drug inflation.
"The future is frightening," said Henry Aaron, a senior fellow at the Brookings Institution.
A recent report by Democrats on Congress' Joint Economic Committee predicts that almost two-thirds of Social Security's beneficiaries will lose at least one-quarter of their cost-of-living adjustments to Medicare premium increases within a decade.
And some lower-income retirees may see the amount of their Social Security checks drop as premium increases for rising prescription drug costs outpace cost-of-living adjustments, also known as COLAs.
Just before their August recess, House and Senate Democrats introduced legislation to ensure that no more than one-quarter of a retiree's COLA could be used for premium increases.
"Limiting how much of a Social Security cost-of-living adjustment can be absorbed by Medicare expenses will reserve a significant portion for other living expenses such as groceries and rent," explained Rep. Pete Stark of California, the senior Democrat on the committee.
Republicans say the Democrats are missing the larger point - the new premium will pay for prescription drug coverage that reduces out-of-pocket expenses.
"If not for the Medicare modernization act, seniors would continue to pay the highest prices for drugs with no help in sight," said Health and Human Services Department spokesman Bill Pierce. "This law offers real hope, while Democrats offer only rhetoric."
Some policy analysts see another problem - taxpayers will have to foot the bill for higher Medicare costs if seniors don't.
"About 90 percent of Medicare's costs now are paid by general taxpayers," said Robert Moffit, director of the Center for Health Policy Studies at the Heritage Foundation. "It's time to ask: Shouldn't there be a limit to their generosity?"
But other policy experts say the Democrats' plan still is sound, even if it only shifts more of Medicare's costs to general taxpayers.
"We as a nation have to decide whether we want to protect the elderly," said Aaron from Brookings. "Lifting some of the burden from the shoulders of the most vulnerable members of our society may not make the overall financing problem go away, but it strikes me as compassionate and reasonable."
Another idea that lawmakers have offered to ease the squeeze on seniors is to compute Social Security's annual COLA with a consumer price index tailored to older adults.
The government relies on the spending habits of young workers to figure the COLA. Some experts say the method understates inflation's effect on seniors because it doesn't completely take into account the growing cost of health care.
A study commissioned by the Senior Citizens League estimates that a retiree with average Social Security benefits in 1984 would have received an additional $7,802 over the last 20 years if the government had used a consumer price index for elderly consumers.
The bill is being sponsored by Reps. Bernard Sanders, an independent from Vermont, and Robert Ney, a Republican from Ohio. But critics say such a change in price indexes would only exacerbate Social Security's long-term financing problems and flies in the face of Federal Reserve Chairman Alan Greenspan's view that the current consumer price index overstates, rather than downplays, inflation's effects.
Washington labor economist Gary Burtless calls a "seniors-only" consumer price index "a zero-sum game."
"We can't raise Social Security benefits without raising taxes," he said. "So if we decide to make the world more financially secure for older adults, we're going to have to make it more financially risky for younger workers who are struggling with higher health care costs themselves as their employers scale back insurance coverage."
(c) 2004, The Dallas Morning News. Distributed by Knight Ridder/Tribune News Service.