My grandmother's Social Security pension is indexed for inflation. What does this mean?

[opal1331]

Social security checks are increased according to the price index, (cola) but are never increased as much as the inflation rate. Too many things are not taken into consideration when they figure the amount of increase, like the cost of home heatng fuel, increase in the cost of medications and hospitalization or secondary insurance for medicare, gasoline and the associated cost of food due to fuel prices.
So, the people on fixed income have been losing buying power for about twenty years now.