Do We Need a Price Index for the Elderly?

Source: Alicia H. Munnell and Anqi Chen, Center for Retirement Research at Boston College, IB#15-18, October 2015

The brief’s key findings are:
The recent news of no Social Security COLA in 2016 will prompt some to argue that an inflation index for the elderly only would have shown a rise in prices.
Historically, an experimental index for the elderly (the CPI-E) has regularly risen more quickly than the broader index used for the COLA (the CPI-W).
However, since 2002, average CPI-W and CPI-E inflation have been virtually identical due mainly to slower growth in health costs.
If health cost growth stays modest, the two indexes may remain similar. But if it surges again, it may be time to use an index designed specifically for the elderly.