| Tue, Jan 23, 2018 @ 09:00 AM

Social Security Gave You a Raise, But You May Not See It

Posted by Medicare Made Clear

Retired Asian Male Poses with Car in GarageRaises have been scant or nonexistent in recent years for people taking social security. That’s why many were glad to hear about the 2 percent social security cost-of-living adjustment (COLA) for 2018. But some people on Medicare may be surprised. Here’s why.

The limited COLAs of the past few years triggered the “hold harmless” rule for people taking social security who are on Medicare. The rule states that an increase in the Medicare Part B premium may not be more than the dollar amount of a person’s COLA in any given year. The intent of the rule is to protect your social security income from rising health care costs.

You may have paid the same monthly Part B premium for a few years now due to the hold harmless rule – even though the standard premium has gone up most years. In effect, low or no social security COLAs have meant low or no Part B premium increases.

Now You See It, Now You Don’t

That welcome 2018 COLA may end up as a line item on your check stub rather than cash in your pocket. The full dollar amount could go toward paying your Part B premium if you were held harmless last year. Premium payments are generally deducted from monthly social security checks, so the additional COLA dollars may come in and go out without you even noticing.

The standard Part B monthly premium is $134 for 2018. The average premium paid by Part B enrollees in 2017 was $109. That’s a difference of $25 ($134 – $109 = $25).

So if your 2018 COLA works out to be $25 per month, then the entire amount will go toward meeting the increase in your Part B premium payment. Your monthly social security “take-home pay” will be the same as last year.

People who receive a smaller COLA that is not enough to cover the premium increase will remain protected by the hold harmless rule. The full amount of their COLA will still go toward their monthly premium payments, but their monthly social security income will remain the same as last year.

“Harm” in Held Harmless?

It may be tempting to feel somehow cheated if you get your social security check and see no change in your take-home pay.

But keep in mind that the hold harmless rule preserves social security income for people enrolled in Part B. It ensures that your social security payments will never go down due to health care costs going up.

The Bottom Line

You might have chosen to spend your COLA money on something besides your Part B premium. But the fact that you didn’t get to also means that your social security income is safe. It may go up, but it won’t come down.

Related Content

The Truth about Your Medicare Part B Premium

Your Medicare Part B Premium: 5 Ways to Pay

For more information, explore MedicareMadeClear.com or contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048.


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