Despite boost in social security, rising Medicare Part B costs leave seniors in bind

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Millions of seniors will soon be notified that Medicare premiums for physicians' services are rising and likely to consume most of the cost-of-living adjustment they'll receive next year from Social Security.

Higher 2018 premiums for Medicare Part B will hit older adults who've been shielded from significant cost increases for several years, including large numbers of low-income individuals who struggle to make ends meet.

"In effect, this means that increases in Social Security benefits will be minimal, for a third year, for many people, putting them in a bind," said Mary Johnson, Social Security and Medicare policy consultant at the Senior Citizens League. In a new study, her organization estimates that seniors have lost one-third of their buying power since 2000 as Social Security cost-of-living adjustments have flattened and health care and housing costs have soared.

Another, much smaller group of high-income older adults will also face higher Medicare Part B premiums next year because of changes enacted in 2015 federal legislation.

Here's a look at what's going on and who's affected:

The Basics

Medicare Part B is insurance that covers physicians' services, outpatient care in hospitals and other settings, durable medical equipment such as wheelchairs or oxygen machines, laboratory tests, and some home health care services, among other items. Coverage is optional, but 91 percent of Medicare enrollees — including millions of people with serious disabilities — sign up for the program. (Those who don't sign up are responsible for charges for these services on their own.)

Premiums, which change annually, represent about 25 percent of Medicare Part B's expected per-beneficiary program spending. The government pays the remainder.

In fiscal 2017, federal spending for Medicare Part B came to $193 billion. From 2017 to 2024, Part B premiums are projected to rise an average 5.4 percent each year, faster than other parts of Medicare.

'Hold Harmless' Provisions

To protect seniors living on fixed incomes, a "hold harmless" provision in federal law prohibits Medicare from raising Part B premiums if doing so would end up reducing an individual's Social Security benefits.

This provision applies to about 70 percent of people enrolled in Part B. Included are seniors who've been enrolled in Medicare for most of the past year and whose Part B premiums are automatically deducted from their Social Security checks.

Excluded are seniors who are newly enrolled in Medicare or those dually enrolled in Medicaid or enrolled in Medicare Savings Programs. (Under this circumstance, Medicaid, a joint federal-state program, pays Part B premiums.) Also excluded are older adults with high incomes who pay more for Part B because of Income-Related Monthly Adjustments (see more on this below).

Recent Experience

Since there was no cost-of-living adjustment for Social Security in 2016, Part B monthly premiums didn't go up that year for seniors covered by hold harmless provisions. Instead, premiums for this group remained flat at $104.90 — where they've been for the previous three years.

Last year, Social Security gave recipients a tiny 0.3 percent cost-of-living increase.   As a result, average 2017 Part B month premiums rose slightly, to $109, for seniors in the hold harmless group. The 2017 monthly premium average, paid by those who weren't in this group and who therefore pay full freight, was $134.

Current Situation

Social Security is due to announce cost-of-living adjustments for 2018 in mid-October. Based on the best information available, it appears to be considering an adjustment of about 2.2 percent, according to Juliette Cubanski, associate director of the program on Medicare policy at the Kaiser Family Foundation. (Kaiser Health News is another, independent program of the Kaiser Family Foundation.)

Apply a 2.2 percent adjustment to the average $1,360 monthly check received by Social Security recipients and they'd get an extra $29.92 in monthly payments.

For their part, the board of trustees of Medicare have indicated that Part B monthly premiums are likely to remain stable at about $134 a month next year.  (Actual premium amounts should be disclosed by the Centers for Medicare & Medicaid Services within the next four to six weeks.)

Medicare has the right to impose that charge, so long as the amount that seniors receive from Social Security isn't reduced in the process. So, the program is expected to ask older adults who paid $109 this year to pay $134 for Part B coverage next year — an increase of $25 a month.

Subtract that extra $25 charge for Part B premiums from seniors' average $29.92 monthly Social Security increase and all that be left would be an extra $4.92 each month for expenses such as food, housing, medication and transportation.

"Many seniors are going to be disappointed," said Lisa Swirsky, a policy adviser at the National Committee to Preserve Social Security and Medicare.

Higher Income Brackets

Under the principle that those who have more can afford to pay more, Part B premium surcharges for higher-income Medicare beneficiaries have been in place since 2007. These Income-Related Monthly Adjustment Amounts (IMRAA) surcharges vary, depending on the income bracket that individuals and married couples are in. Nearly 3 million Medicare members paid the surcharges in 2015.

For the past decade this is how surcharges have worked:

Bracket One: Individuals with incomes of $85,001 to $107,000 were charged 35 percent of Part B per-beneficiary costs, resulting in premiums of $187.50.

Bracket Two: Incomes of $107,001 to $160,000 were charged 50 percent, resulting in premiums of $267.90.

Bracket Three: Incomes of $160,001 to $214,000 were charged 65 percent, resulting in premiums of $348.30

Bracket Four: Incomes of more than $214,000 were charged 80 percent, resulting in premiums of $428.60.

(Information for married couples who file jointly can be found here.)

Now, under legislation passed in 2015, brackets two, three and four are adopting lower income thresholds, a move that could raise premiums for hundreds of thousands of seniors. Bracket two will now consist of individuals with incomes of $107,001 to $133,500; bracket three will consist of individuals making $133,501 to 160,000; and bracket four will include individuals making more than $160,000.  (Thresholds for couples have been altered as well.)

As John Grobe, president of Federal Career Experts, a consulting firm, noted in a blog post, this change "will add another layer of complexity" to higher-income individuals' decisions regarding "electing Part B."

If you've retired recently, moved to part-time status, divorced or otherwise undergone life changes that affect your income, you can ask Social Security for a new IRMAA determination, said Casey Schwarz, senior counsel at the Medicare Rights Center. Tips on what to do can be found at that organization's site for consumers, Medicare Interactive.

We're eager to hear from readers about questions you'd like answered, problems you've been having with your care and advice you need in dealing with the health care system. Visit to submit your requests or tips.

KHN's coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

Kaiser Health NewsThis article was reprinted from with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.


  1. Debbie Wood Debbie Wood United States says:

    So we seniors slip down even more into poverty.  No real raise at all.  Meanwhile rents, utilities continue to rise in costs and I still have to pay copays and suplimental insurance while congress works on ways to take Medicare and Social Security away.  I don't have much else and that is true of everyone I know.  Last year they took all the raise plus a dollar more a month.  So I ended up with a dollar less.  Guess they want us all homeless.

    • Elizabeth Johnson Elizabeth Johnson United States says:

      What you are experiencing is the Republican GOP mandate to appease their wealthy backers.

      If you read some the GOP materials on their agenda. They want the churches and communities to pick up the costs of supporting the elderly, sick, and poor.

      Stop voting for GOP candidates will help. The GOP is NOT the same party as when Lincoln was around. The party today is controlled by wealthy backers, special interest, and the "Ultra Right or Right wing Conservatives. I am conservative, but these people are Wacked.

  2. George Hall George Hall United States says:

    On my job, I have had one small raise in six years.  My expenses have continued to rise.  I don't feel sorry for someone who is only paying for 25% of their doctor bills.

  3. Bonnie Carmean Bonnie Carmean United States says:

    Why must seniors who have worked their entire life continue to have to pay more and more when those who have chose not to work live off free rent, free food and free medical services and medicine, free phones from the government paid for with the tax money of those of us who have worked? I have tried to be a good citizen of this country and although I have had hard times being a single parent, I never took money from the government. I worked to pay for all that including child care, working more than one job. I never used the system. Looks like I was the stupid one for trying to be a better citizen because now I am still having to pay more and more for health care and prescriptions. Something is wrong with our system. Too many have dabbled into it. Too many have been using it and getting disability and living a great life while I who have crippling arthritis am still working two jobs and it doesn't look like I will be able to quit....even though young people have the same condition and get more than I can get on social security. This is not right. Hopefully the Trump administration will be looking into this and go after these people who are robbing me of my hard earned money I and my employer unvoluntarilly paid in each pay check.

  4. James Lowder James Lowder United States says:

    I had to go back to work on a minimum wage part time job to pay for my wifes ACA health insurance and now their raising the premiums on medicare. Iv'e been on medicare for 2 years and they've taken every increase I was supposed to get. Pack of thieves.

  5. Edward Branca Edward Branca United States says:

    As a disabled recipient of Medicaid, I find Trump's Medicaid cuts to be a threat to my life.  When someone assassinates Trump, it will clearly be an act of justifiable homicide.  When Trump gets assassinated, and I hope that will happen very soon, I will be glad, and I will go out and celebrate with a friend.  We'll parade down the street singing Happy Days Are Here Again and Ding Dong The Witch Is Dead.

  6. Richard Remmele Richard Remmele United States says:

    We need to make it better by using the CPI-E that weights rents and housing, Medical, and other more heavily and is thought to better reflect the spending of the Elderly. Right now, Social Security's cost-of-living adjustments (COLA) are tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W.

    Republican lawmakers have suggested ditching the CPI-W in favor of the chained CPI. Like the CPI-W, the chained CPI measures the change in price for a predetermined basket of goods and services. But there's one big difference. The chained CPI takes into account a behavior known as substitution that the CPI-W does not.

    Substitution involves the idea that consumers will trade down to a less expensive good or service if the price of another good or service increases too much in price.  But in actuality most seniors living on Social Security have already made as much of that trade off as possible because most have Social Security as their largest source of income or their only source of income.  Trade offs only really affect those higher income Social Security beneficiaries.  There are other ways to address that if it is necessary.

    Since substitution implies that the chained CPI will grow at a slower pace than that of the CPI-W, it also means that seniors would see a smaller "raise" each year if the chained CPI were used. It is too small right now

  7. Laurie Bauer Laurie Bauer United States says:

    My taxable income is way below those Brackets Listed here!
    What would help me is Adjusting the formula for Calculating SS as a taxable income.
    As A single individual if my taxable income above 25,000 Or (42,000-Joint filed I think ) then a portion of my SS Income becomes taxable In Effect my taxable income above 25 K is being taxed double. that means even any interest income or other miner payments are causing a portion of my SS to become taxable income. Raising that bracket would help those of us between 25,000 and 107 000 income.

  8. Oscar Tapia Oscar Tapia United States says:

    this is trumps` version of the FINAL SOLUTION !! let them die ,let them die !

  9. Jeanine Goodman Jeanine Goodman United States says:

    Well, another step down into poverty.  Guess they want seniors to go ahead and die!  There is no relief for Seniors it seems........

  10. Augie Snyder Augie Snyder United States says:

    yet they think it's fine to raise the minimum wage for unskilled workers to $15/hr. shameful.

  11. Jay Alvarez Jay Alvarez United States says:

    2017 I broke even, next year I have to pay more.

  12. Aida Gonzalez Aida Gonzalez United States says:

    Talking about genocide committed against seniors by our "great Congress". You don't have to go far from Washington DC to see the slaughter going on against seniors in this country. Shame on all of them. They all deserve another economic catastrophe like 2008.

  13. Terry Tarvin Terry Tarvin United States says:

    I,m drawing less today than I was in 2010 I,m taking 3-4 times the meds have rider with humana that makes me pay about 200.00 a month for ins. plus copay on meds. and 2 dr. is another 200.00 thats before power water phone cable home /auto Ins. taxes tags if any thing left buy a little gro. dont know what we are going to do I worked 50 years and paid into SS thinking I would be OK when I needed SS now just cant get by on what I draw and their 1000 s in same boat its a dam shame the way goverment has done us while they are up their living like kings  just saying

  14. Victor Manuel Guerra Victor Manuel Guerra United States says:

    Keep voting republican, and you will be out in the streets homeless. Vote against your own interest seems to be the norm..........till your eating dog food!

  15. Paul Martin Paul Martin United States says:

    What a joke just keep it like it is and pretend you got a raise what a joke.

  16. Donald Whitbeck Donald Whitbeck United States says:

    Been on low income for years now. Everything keeps on going up, BC/BS keeps going up and so does the deductibles.  I have no savings, we go month to month.  Can't afford a car, the prices are way passed my income level. I don't qualify for a car loan because of my income. The Seniors in this country have been screwed by Congress for decades. Anything Medical is a joke.  I can't even meet their deductibles if I had to go into the Hospital for anything. Food prices have gone up.  They promise us help when running for office, but that help never comes.  God help us all!

  17. Stan Sloan Stan Sloan United States says:

    Again the Government is robbing the seniors ,outrageous, but they find no problem in giving illegal aliens and muslims all the free stuff they want,just like Brown in California. ,they don't give a damn about the people who pay the taxes to give to these people and pay the fools we stupidly elect to Government  then we find we've been conned.

  18. Myron Krouse Myron Krouse United States says:

    this is absurd,how come they give us a measly 2.2% raise,and the members of congress and senate all get at $10000. why can't they try to live on an average social securitiy payment for 1-year or more.

The opinions expressed here are the views of the writer and do not necessarily reflect the views and opinions of News Medical.
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