This article is to serve as a reminder of the different Medicare enrollment periods and…
In 2018, recipients of Social Security will see a 2 percent increase in benefits due to the rise of cost-of-living. This adjustment in cost-of-living is the highest of its kind since 2012. Last year, there was only a .3 percent rise and in 2016, there was no change at all. Although this increase is good news, the additional income will most likely be consumed by higher Medicare Part B premiums. Therefore, recipients will not see much of a change in benefits.
Adjustments in cost-of-living are tied to the consumer price index. For example, due to rising inflation rates and cost of gas, recipients will get a small boost in 2018. This boost amounts to approximately $27/month for the typical retiree. The change in cost-of-living also affects the maximum amount of earnings subject to the Social Security tax. In 2017, this amount was $127,200. For 2018, it will be $128,700.
Most seniors and disabled people however, will not see much of an impact since a large percentage of them have their Medicare Part B premiums deducted from their monthly Social Security checks. When Social Security benefits remain constant, so do Medicare premiums. Due to the rise in Social Security benefits in 2018, Medicare premiums will rise.
This “hold harmless” provision does not apply to approximately 30 percent of Medicare recipients:
- Those enrolled in Medicare but are not yet receiving Social Security benefits
- Seniors earning more than $85,000/year
- New Medicare beneficiaries
- Those who receive both Medicare and Medicaid benefits
Those who fall into the categories above have been paying higher Medicare premiums over the past couple of years, while those included in the “hold harmless” provision remained more or less the same. Because of the raise in Social Security benefits, Medicare will most likely hike premiums for the seniors in the hold harmless group.
For 2018, the monthly federal Supplemental Security Income (SSI) payment standard will be $750 for an individual and $1,125 for a couple.
For additional information on the 2018 Social Security benefit levels, click here.