Inflation Index for Elderly Studied : They Tell Senate Panel of Lacking Funds for Food and Care

WASHINGTON â€”  The Senate Aging Committee, considering the need for a special inflation index for senior citizens, heard dramatic testimony Monday from elderly Americans describing some of the financial travails of old age, including living with rotted teeth and having only breakfast cereal for lunches and dinners.

“We eat a lot of cornflakes,� Florence Thompson, 73, told the committee, explaining how she and her husband struggle to live on $609 a month--$160 of which goes to prescription drugs.

The Thompsons are among many elderly who are living on Social Security checks and other federal retirement programs that were raised by 1.3% in the latest annual cost-of-living increase in January. “Folks who depend on these programs could not believe their costs had risen only 1.3%,� committee Chairman John Melcher (D-Mont.) said. “They felt cheated.�

Special Index Sought

Melcher said the consumer price index, the federal inflation measure used to determine the annual Social Security increase, underestimates the cost of health care, food and fuel, which disproportionately affect the elderly. He is sponsoring an amendment to the current supplemental appropriations bill that would require the government to issue a special inflation index for the elderly.

Thompson, of Fairview, Mich., said she also buys “the cheapest chicken we can get� to stretch her income for food, less than $100 a month after she pays all their other bills.

Rose Affayroux, 71, of Baltimore said she eats no breakfast, often has a bowl of soup for dinner and gets the main meal of the day at a senior citizens’ center, a 75-cent lunch. She and her husband share an income of $923 a month, from which they must subtract $475 for rent, $122 for utilities, $96 for health insurance and $67 for life insurance.

“I need a tooth pulled, but I don’t dare go to the dentist,� she said. “I have a tooth that is just a shell in my mouth.�

‘Can’t Afford It’

Margaret Fleming, who lives on a farm in Virginia, said that “it’s kind of tight going sometimes� to depend on her Social Security survivor’s benefit of $474 a month. Her house needs repairs, she said, “but I can’t afford it� after the monthly bills are paid.

Sen. Alan K. Simpson (R-Wyo.) urged caution in revising the inflation standard for Social Security. Although the poor need help, he said, other elderly people who can afford to pay for themselves are taking advantage of government programs.

“I have been to senior centers and found people who winter in Sun City, Ariz., who come to the center and pay 75 cents when they could pay $5.75,� said Simpson, a committee member. “I don’t think that’s right. We have to do the sorting.�

New standards requiring an income test should be applied to a variety of federal programs, including Medicare, to ensure that the more affluent get less government largess, he said.

But Melcher said a revision is vital and needed soon, arguing that a more precise measure of inflation would have given the average Social Security beneficiary an additional $5 a month in the last raise. “This may not seem like much to you and me, but it’s important to someone trying to get by on a fixed income,� he said.

If Melcher’s amendment is adopted by Congress, it would require the Bureau of Labor Statistics to develop a separate consumer price index for older Americans.

BLS Commissioner Janet L. Norwood said a full study of the buying habits and expenses of the elderly would take several years and cost millions of dollars.

However, she said, her bureau could produce a new cost index quickly, giving more weight to items bought by the elderly, such as medical care and fuel oil. But this measurement is unlikely to differ significantly from the inflation index for the general population, she said.

Less Spent on Other Items

Older people spend more for medical care than the general population but spend less for other fast-rising items in the general index, such as college tuition, new cars and entertainment.

In addition, Norwood said, Congress would have to give a definition of elderly in requesting a new index because there is wide variation among elderly age groups.

For example, people between 65 and 74 have the same general spending habits as the overall population, except for somewhat higher outlays for medical care. Those over 75 live much differently, however, spending a much heftier portion of their incomes for medical care and much less for gasoline, automobiles and clothing.