While Social Security provided their largest raise to beneficiaries in six years, some speculate nearly 70% of seniors will not see it.
Social Security’s cost-of-living adjustment for the upcoming year will be 2%, however those who have been protected by “hold-harmless” will see significant premium inflation.
“Hold-harmless” has protected those enrolled in both Social Security and Medicare, which had premiums deducted from their check.
“The “hold-harmless” situation affects people differently according to the level of their Social Security benefit. A held-harmless beneficiary with a $2,000 monthly benefit would still receive a net COLA of $15 next year, for example. But the COLA flattens to zero with a monthly benefit of around $1,250 and below explains Mark Miller, a contributor for Reuters”
Sean Williams, a contributor for The Motley Fool gives a real world example of “hold-harmless.” If Part B premiums rose by 9%, but Social Security’s COLA increased by just 1%, seniors could see their take-home drop because of higher Part B premiums. For these seniors, “hold-harmless” would kick in and ensure that their Part B premiums wouldn’t rise by more than their Social Security COLA. Conversely, seniors who are new to Medicare, haven’t enrolled in Social Security but are enrolled in Medicare, or prefer to be billed directly for Part B premiums are left to face the full brunt of Part B premium increases each and every year.”
Members not on Social Security won’t face a higher premium for Part B, however those that have been protected by “hold-harmless” will see most or all of their COLA go towards paying their Part B premium.
“In addition, some Part B enrollees with higher incomes will see changes in their income-related monthly adjustment amounts (IRMAA), which affects about 5% of people with Medicare Part B” says Michael Wald, a contributor for FedSmith.com.
Even with all of the changes occurring, nearly 30% of all Medicare beneficiaries will still see their Part B premium below the standard $134 for 2018.