The Medicare Part B Squeeze on Retiree Payment Changes
You cannot accurately forecast your 2027 cash flow without factoring in Medicare Part B. For the vast majority of retirees, Medicare Part B premiums are deducted directly from their Social Security checks before the money ever hits their bank account. When the official COLA is announced in October, the Centers for Medicare & Medicaid Services (CMS) usually announces the new Part B premiums shortly afterward.
Because healthcare inflation traditionally outpaces general economic inflation, Medicare premiums often rise at a faster percentage rate than your Social Security benefit. If your gross benefit increases by $40, but the standard Medicare Part B premium increases by $15, your net gain is only $25. This “squeeze” is the primary reason many retirees feel like they never actually see their cost-of-living adjustments.
Fortunately, federal law includes a consumer protection mechanism known as the “hold harmless” provision. This rule prevents your standard Medicare Part B premium increase from being larger than your Social Security COLA. In simple terms: your net Social Security check cannot go down from one year to the next simply because Medicare premiums rose. If the Medicare increase is larger than your COLA, your premium increase is legally capped at the exact dollar amount of your COLA.
However, the hold harmless provision does not apply to everyone. You are not protected if:
- You are a new Medicare enrollee in 2027.
- You pay your Medicare premiums directly to CMS rather than having them deducted from your Social Security check.
- You are subject to the Income-Related Monthly Adjustment Amount (IRMAA) because your modified adjusted gross income exceeds certain thresholds.
UNSUBSCRIBE ME!
Rich get richer and the poor get poorer
I do t think we should pay taxes on our social security. We already payed taxes while we worked all those years. We can barely afford groceries and bill. Medicare part F is so high we’re paying over 659.00 a month for my husband and 397.00 for mine there goes our SSI check
How are suppose to buy food and our medicine. Everything keeps going up and there is not enough money left to pay rent, food, medicine. So poor gets poorer and there is no middle class only rich and richer. Soon there will be more homeless seniors on the streets cause we can’t afford the rent in increases. Thanks Mr Trump maybe your daddy can help us older people out. Hope one day you will be walking in our shoes. Trying to figure out to have some shelter or food to eat, or be sick or die
Why should someone who pays less get more? The more u pay……the more u get.
Seniors are a after thought. Food prices rising, utilities increasing and insurance is mandatory. Insurance is a poor example of what we all worked our life for. Nothing – mandatory pay into social security, along with Uncle Sam. Then Uncle Sam says nope, we will put you a allowance. Here’s your sign.
100% inflation 1%-2 cola past 3 yrs?
Inflation cooling, I don’t think so. May 4.2 and April 3.8, Fed’s probably going to have to increase the fed rate to slow down inflation. Correct me if I’m wrong.
By the time I am old enough to retire, there won’t be any Social Security left. Speaking of the left, we need to thank them for blowing all of this up for us and you know what, they’re not the ones losing any sleep over all of this! I totally agree, the rich get richer, forget the middle class, there isn’t one! All we can really do is pray, let the good Lord take over, he will provide.
Looks like Click Bait to me. You can “Search” COLA 2027, and even recent, hours old articles, say the exact opposite! Some state that the 2027 COLA could be the largest in years! Why do people post articles like this, that only contribute to fear and anxiety. Well, I think we all know why…. Advertisers. I’m sick of click bait. One doesn’t know what to believe anymore.
Looks like Click Bait to me. You can “Search” COLA 2027, and even recent, hours old articles, say the exact opposite! Some state that the 2027 COLA could be the largest in years! Why do people post articles like this, that only contribute to fear and anxiety. Well, I think we all know why…. Advertisers. I’m sick of click bait. One doesn’t know what to believe anymore.