The fourth quarter is when senior citizens learn about their social security benefits and Medicare. They find out if they will receive higher social security, and how much, also how much monthly premiums will be for Medicare. Most people with Medicare will face higher premiums in 2018.
Medicare Part B insurance covers outpatient care, preventative services, ambulance services, laboratory tests, and durable medical equipment.
The Part B premium increases will not only will this affect older adults who were stable due to their social security benefits, but it will affect a large number of low-income seniors who struggle on a fixed income.
“Hold Harmless”
In order to protect senior citizens living on fixed incomes, a federal law provision, “hold harmless,” prevents Medicare from raising Part B premiums more than their annual cost-of-living adjustment (COLA) from Social Security. The premiums are being automatically deducted from their Social Security checks. About 70 percent of Medicare enrollees are protected by the “hold harmless” rule.
In 2016, there was no Social Security COLA, so those under “hold harmless,” did not have their Part B premiums rise that year. Last year, Social Security gave enrollees .03 percent COLA, raising premiums from 104.90 to $109 for the hold harmless group. But, Medicare enrollees not in the group (30%) had to pay the full raise in premium, $134.
The Changes
In 2018, the cost-of-living adjustment will go up 2%, which is the highest raise in six years that senior citizens have received. This year, the Medicare Part B premium has remained unchanged from last year’s $134 a month. Because of the premium remaining unchanged, majority of seniors that were protected by the hold harmless provision will be get hit with a major increase in their premium. They will be expected to go from paying $109 a month, to $134 a month, a $25 a month increase. The $25 these senior citizens will be paying leaves them will little to no money for expenses.
Enrollees who are not part of the group, about 30 percent, will not see any additional costs because they already took the hit the previous year.
For high-income enrollees, the more you have the more you pay. Their Part B premiums will increase depending on their income, rising anywhere from $187.50 to $428.60.
| Income (adjusted gross income plus tax-exempt interest income): | ||
| Single tax return | Married filing jointly | Monthly Part B premium (per person) |
| $85,000 or less | $170,000 or less | $134 (may be less if covered by the hold-harmless provision) |
| $85,001 to $107,000 | $170,001 to $214,000 | $187.50 |
| $107,001 to $133,500 | $214,001 to $267,000 | $267.90 |
| $133,501 to $160,000 | $267,001 to $320,000 | $348.30 |
| More than $160,000 | More than $320,000 | $428.60 |
Other Alternatives
Head of the Centers for Medicare and Medicaid Services, Seema Verma said in a news release, “We encourage Medicare beneficiaries to explore their options to make an informed choice between original Medicare and Medicare Advantage before open enrollment ends on Dec. 7.”
It is a good time to begin exploring other options, to avoid the large financial hit from the increase of Part B premiums. Medicare Advantage plans, Part C, have become popular, offering all that Medicare offers, sometimes cheaper. Instead of having to enroll in Part A, and Part B, and buying a separate Part D (prescription drug plan), Medicare Advantage has all of these under one plan. Medicare Advantage also offers an annual out-of-pocket limit, meaning once you have reached this limit, you will have no more out of pocket expenses.
Another option to consider helping pay for Part B premiums is a Medicare Supplement plan. These plans help pay the 20% that Medicare leaves up to the individual to pay.
It may be confusing comparing plans and figuring out which will tailor your needs, on a budget. EZ.Insure ensures finding you the best Medicare Advantage or Medicare Supplement plan in your region, within your financial plan. Get a quote by entering your zip code in the bar above. You can also call 888-753-7207, or email replies@ez.insure.You will be assigned your own highly trained agent to fulfill your needs.