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How are Social Security benefits
and the Part B premium changing?
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The base premium for Medicare Part B (medical insurance) is
$134 in 2018. This is the same as the base premium from 2017. People
who paid the base premium of $134 in 2017 will pay the same amount,
while most people who paid less will begin paying $134 per month.
About a quarter of people will not pay the full $134 Part B premium
because their Social Security benefits did not increase enough in 2018
to cover the increase in the Part B premium. There is a rule that your
Social Security benefits cannot decrease because of an increase in the
Part B premium. This is known as the hold harmless provision. Most people
have the Part B premium deducted from their Social Security benefits.
Each year, the increase to the Part B premium cannot be greater than
the cost of living adjustment (COLA); otherwise, a person’s Social
Security award amount would go down once the Part B premium is
deducted. People in this situation pay a lower premium than the
standard premium so that their Social Security benefits do not
decrease. They pay a premium increase that is the same dollar amount as
their cost of living adjustment.
This year, the cost of living adjustment is 2%, which is
higher than in past years. If you did not pay $134 for Part B in
2017, part or
all of your cost of living adjustment will go toward paying
the increase to your Part B premium. This means that you may
not see an increase to your social Security benefits once the Part B
premium is deducted. You should look at your Social Security Statement
for personalized information about your benefit and premium amount.
Here are examples of how the 2% COLA can affect the Part B premium:
- Tom’s social security income in 2017 was $1,500
and his Part B premium was $109. In 2018, Tom’s COLA will be 2% of
$1,500, or $30. The increase in his Part B premium, from $109 to
$134, is $25. Tom will not be affected by the hold harmless
provision this year, so he will pay $134 for the Part B premium,
and will see a net increase of $5 in his monthly Social Security
earnings.
- Magda’s social security income was $950 in 2017
and her Part B premium was $104. This year, the COLA will increase
her Social Security award by $19. Magda’s premium will be
raised by the dollar amount of her COLA, making it $123 in 2018.
There will be no increase to Magda’s Social Security
award once the Part B premium has been deducted.
Keep in mind, $134 is the standard premium for people
with a yearly income below $85,000 for an individual ($170,000 for a
married couple). If your income is higher than that, you may have to
pay an income-related monthly adjustment amount,
also known as IRMAA. If you would like to learn more about the IRMAA,
including how to appeal your IRMAA if you believe it is incorrect, you
can contact your State Health Insurance Assistance Program (SHIP).
Visit www.shiptacenter.org or call
877-839-2675 to contact your SHIP.
If you have limited income and assets, you might also be eligible for
the Medicare Savings Program, which pays
the Part B premium and, in some cases, the Part A premium if you have
one, as well as Part A and B deductibles, copays, and coinsurances.
Contact your local SHIP to learn more about Medicare Savings Program
eligibility and to apply.
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To find out what you can expect to pay for this year’s
Medicare premiums, deductibles, and coinsurance for Medicare Parts A, B,
and D as well as Medicare Advantage plans, download 2018 Medicare Costs, a free Medicare
Interactive resource from the Medicare Rights Center.
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