Medicare Part B premiums for 2018 were just announced. The standard Part B premium amount for 2018 will not increase. It will remain the same at $134.
However, the Social Security Administration announced information regarding a COLA increase. This increase will be the biggest increase since 2012.
The annual cost-of-living adjustment will be 2% in 2018. This means that social security recipients will see an average monthly benefit increase of $25. However, if you’re a senior in the hold harmless group and your Medicare Part B premium is automatically deducted from your SS check, you won’t see a penny of that $25.
Also, if you’re a higher-income retiree, the Medicare Part B income bracket you fall in may be impacted in 2018 as well. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) made changes to Medicare’s income-related premiums.
Medicare Part B Premiums for 2018
Your Medicare Part B premium for 2018 will remain the same if:
- You enroll in Part B for the first time in 2018
- You don’t get social security benefits
- You’re directly billed for your Part B premiums (meaning your premium is NOT taken out of your Social Security benefits)
- You have Medicare and Medicaid, and Medicaid pays your premiums (your state will pay the standard premium of $134)
- Your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount. If so, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charged added to your premium.
2018 IRMAA Part B Increases
Since 2007, Part B premium surcharges for higher income beneficiaries has impacted individuals with an income of more than $85,000.
MACRA made changes that will affect recipients with an income above $133,500 for individuals and $267,000 for married couples.
For individuals whose income is between $133,501-$214,000, and married couples who income is between $267,001-$428,000, will end up paying higher Medicare premium surcharges starting next year.
If your income falls in the third tier, you’ll go from paying 50% of Part B program costs to 65% in 2018.
Hold Harmless Provision & the Social Security COLA Increase
If you’re protected under the “hold harmless” provision, you most likely won’t see any of your SS COLA increase. Instead, it will get eaten up by your Medicare Part B premium.
The provision protects retirees that have a lower income and struggle to make ends meet. It stops Medicare from raising Part B premiums if it resulted in reducing recipients monthly SS benefits.
New Medicare enrollees, as well as those dually enrolled in Medicaid or enrolled in Medicare Savings Programs, are not protected by this provision.
Those who are protected by the provision have their premiums deducted from their monthly SS check. They pay around $109 for their Part B monthly premium. Those who are not part of the provision pay a standard monthly premium of around $134.
Since Part B premiums will remain the same for 2018, you’ll see that extra $25 go toward paying the difference between the $109 and $134 premium.
This is because the premium increase won’t negatively impact their individual SS benefits due to the 2% COLA benefit increase.
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