By Joanne Bump
Solvency of Social Security (SS) – Many seniors depend on their SS benefits as their primary source of income, according to the Congressional Research Service (CRS) in 2025. A study by the CRS was based on a national longitudinal survey. These SS benefits are essential for the livelihood of most seniors. Table 1 below shows that those with the lowest incomes rely on SS for 83 percent of their income. Many state employee retirees fall into the 2nd and 3rd income groups, showing their reliance on SS is a significant portion of their income. As retirees age, their other source of earnings tend to decline, making SS benefits more important to them.
SS has its own income source primarily from payroll taxes that individuals have paid into during their work life. These funds are dedicated to the SS benefits and can’t be used for other government programs. SS funds legally should not be used to pay down the national debt or other fiscal priorities. There are many solutions which have been proposed to fix the SS shortfall forecasted to hit by 2032. However, there is a shortage of interest in adopting these solutions. If the potential insolvency isn’t addressed, SS benefits may be cut by an estimated 20 percent by 2032. Also, Medicare’s Hospital Insurance Fund is estimated to face insolvency by 2033, resulting in significant across-the-board cuts. The congressional leaders that will be serving as a result of the upcoming midterm elections will be the ones deciding whether or not to fully fund SS and Medicare.
SS Cost of Living Adjustments (COLA) – The COLA is estimated at3.6 percent starting January 1, 2027. This is slightly higher than the COLA for 2026 of 2.8 percent and for 2025 of 2.5 percent. COLA is provided to help benefits keep pace with inflation over time. It is announced each year in October and starts in January. These COLA adjustments have been kept lower than actual costs for seniors. This is due to using the Consumer Price Index (CPI) for urban wage earners (CPI-W) rather than the CPI-E for the elderly, which indicates that seniors spend more of their income on housing and medical care, experiencing higher rates of inflation over time.
It’s important to note that cuts to traditional Medicare coverage for prescription drugs and bio-marker tests discussed below, will not impact your Medicare Advantage plan for Michigan State Employee Retirees. However, it’s vital to understand that these kinds of reductions are already under serious consideration by the administration.
Sunset for Traditional Medicare Subsidy for RX Drugs – The administration announced its intention to end subsidies for Medicare prescription drugs which have lowered the monthly premiums for traditional Medicare drug coverage for the past two years. Without the subsidy, millions of Americans 65 and older could pay hundreds of dollars more next year for Medicare drug premiums. The cost factors affecting seniors are coming from reductions to government benefits like prescription drugs, where the ending of subsidies forces seniors to go without or pay higher prescription drug prices. These higher costs are not included in the CPI calculations but significantly impact the affordability of prescription drugs and their unfunded increase in health care costs.
Millions of U.S. Women May Lose Traditional Medicare Coverage for an Essential Diagnostic Test for Breast Cancer – According to NBC news on 6-29-2026, the federal administration is considering ending reimbursement of traditional Medicare coverage for a specific type of breast cancer diagnostic test, called the biomarker test, that is used by early-stage breast cancer patients to determine if they require radiation. Rather than by an act of Congress, this action is based on a recommendation from MolDX, a molecular-diagnostics program administered by Palmetto GBA (Government Benefits Administrator) advising the Centers for Medicare and Medicaid Services (CMS). If the contractor’s recommendation is finalized, the traditional Medicare coverage will impact coverage in 28 states.
Biomarker testing is used to determine the best treatment for the breast cancer patient, reducing costs for less effective treatments. The test costs about $5,000 and analyzes the patient’s tissue and blood to identify a biomarker which helps to target therapies that improve chances of survival and a better quality of life. Many insurance companies require biomarker testing before approving treatments, so not covering these tests may block further treatments. Many patients can’t afford to pay out of pocket for this test. According to the American Cancer Society (ACS), breast cancer is the 2nd leading reason of cancer death in women, following lung cancer. Also, the ACS estimates that for breast cancer in the U.S. for 2026, approximately 321,910 new cases of invasive breast cancer will be diagnosed in women and about 42,140 women will die from breast cancer.
Michigan Pharmacy Closures – Due to financial strain,270 pharmacies have closed in Michigan from 2024 to September 2, 2026, with three more pharmacies closing in Traverse City as announced in early September. Ninety of these closures were independent pharmacies in the first half of 2024. According to Miguel Rodrigues of American Pharmacies (AP), “It’s devastating news for those communities where they were serving patients, but, unfortunately, it’s also typical of what’s going on around the state and has been for, you know, at an accelerated rate for the last five to 10 years.”
Role of Pharmacy Benefit Managers (PBM) – The gatekeepers of the health care industry, the PBMs, add to the financial stress. They determine what drugs are covered, where customers can buy their medications, how much patients pay, and the amount that pharmacies are paid to dispense these medications. Pharmacies say they have no control over the price they can charge customers. These decisions are made by the PBMs. Pharmacies say they are being paid less than the cost they paid for the drug alone, so it’s not profitable. Those looking for solutions are asking the Michigan Legislature for help. Pharmacies are a significant resource to the communities where they are located, especially in these times when patients have less access to health care insurance.
Joanne Bump serves as feature columnist for “Retirement Matters.” Column content is time sensitive and is based on information as of 9/6/26. Sources are primarily from non-profit, and government policy research organizations. Joanne can be contacted by e-mail at joannebump@gmail.com.