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Oscar Chaffee SIXTY PLUS

A separate consumer price index for the elderly is being proposed, based on the fact that the elderly may be hit harder by inflation than the general population.

This is because the elderly as a group spend more on health care, the price of which has tended to climb faster than overall prices, according to the Congressional Research Service.

A study by the Bureau of Labor Statistics indicated that, between December 1982 and December 2001, average inflation for the elderly household (age 62 and above) was 3.4 percent, compared with 3 percent for wage earners and clerical workers.

Some think that these figures do not reflect accurately how inflation affects the elderly, since there are differences in spending patterns.

The elderly tend to spend a larger share of the household budget on goods and services whose prices have risen faster than the average. It also is argued that Social Security has not kept pace with the prices of goods and services purchased by the elderly.

This is one of the issues that Congress may consider in studying Social Security reform.

One of the big differences in spending patterns is in the field of health care. Those 65 and older spend more than twice as large a share of their total outlays on health care as the overall population.

The elderly also spend more for transportation, insurance and pensions and cash contributions to people outside the household, including alimony, child support and care of students outside the home.

The differences are even larger for people over 75. Those elders spend about three times as much on health care as the general population.

It also is noted that health-care costs have been rising much faster than the general price level. Medical-care costs have risen at the average annual rate of 5.8 percent between December 1972 and December 2001, compared with 3 percent for the average price level.

The elderly are hardest hit, since they use a greater share of health-care services than the general population. Because the elderly spend more for medical services, they may be hit harder by inflation than the rest of the population.

Actually, the statistics may not fully reflect the costs encountered by the elderly population.

This is because the elders tend to use a greater than average share of items whose prices have tended to climb faster than overall prices. They also tend to use less of those items whose prices have been rising more slowly.

There also are individual differences. Some of the elderly experience inflation rates higher than the average, and some face lower inflation rates than either the overall measure of the elderly or the general population.

The differences are caused by varied spending habits. Oscar Chaffee is a retired Gazette state editor. He can be reached by writing to: Oscar Chaffee; Billings Gazette; P.O. Box 36300; Billings, MT 59107.

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