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Ask Bob: Medicare Premiums are Reducing My Social Security Benefit

A reader's Social Security benefit is diminishing over time.

Question

I receive a very small SSA (Social Security Administration) benefit because the bulk of my retirement income comes from a state pension fund in the state where I worked for over 20 years. However, I do have a tiny SSA monthly benefit which, unfortunately, has become smaller since January, 2017. For 2 years ( 2014-2016) my monthly benefit minus Medicare Part B premium was about $140. Then, in January of 2017, my benefit was reduced to $118. I was told at that time when I inquired at the SSA office near me that a change had been implemented and I had to pay the full Medicare part B premium.

I did online research at SSA.gov which stated: "The increase in Medicare premiums cannot cause the Social Security benefit to go down."

Since I am having absolutely no success discussing this with the SSA agents on the phone due to the fact that they are unaware of this provision, I am getting frustrated. Do you have any suggestions as to who I might contact in order to try to resolve this issue?

Answer

Unless the person is not eligible, as described, the benefit amount should not be going down, says Martha Shedden, president and co-founder, National Association of Registered Social Security Analysts. “There are some exceptions that may apply to this person, but if not, I would suggest that they quote this blog information and ask to speak to a manager.”

The text below is from the 11/30/2020 Social Security Administration Blog:

Social Security works together with the Centers for Medicare & Medicaid Services to make sure you won’t have a reduction in your Social Security benefits as a result of Medicare Part B premium increases.

A special rule called the “hold harmless provision” protects your Social Security benefit payment from decreasing due to an increase in the Medicare Part B premium.

The Part B base premium for 2021 is $148.50, which is $3.90 higher than the 2020 base premium.

Most people with Medicare will pay the new premium amount because the increase in their benefit amount will cover the increase.

However, a small number of people will see little or no increase in their Part B premium — and their Social Security benefit checks will remain the same — because the amount of their cost-of-living adjustment isn’t large enough to cover the increase.

To qualify for the hold harmless provision, you must:

  • Receive Social Security benefits or be entitled to Social Security benefits for November and December of the current year.
  • Have your Medicare Part B premiums for December and January deducted from your monthly benefits.

There are exceptions:

The hold harmless provision does NOT apply to you if:

  • You enroll in Part B for the first time in 2021.
  • You pay an income-related monthly adjustment amount premium.
  • You are dually eligible for Medicaid and have your premium paid by a state Medicaid agency.

You can learn more by visiting Medicare.

Shedden also shared another link from this Medicare Interactive website with the same information, but written a year earlier using 2020 numbers:

Increases in Part B premiums and the hold harmless provision

Each year, the Centers for Medicare & Medicaid Services (CMS) set the following year’s Part B premium. In 2020, the Part B base premium will be $144.60. Most people will pay this amount. A small number of people pay a premium that is lower than the base premium. These people are protected by the hold harmless rule.

The hold harmless rule protects you from having your previous year’s Social Security benefit level reduced by an increase in the Part B premium so long as:

  1. You are entitled to Social Security benefits for November and December of the current year (2019);
  2. The Medicare Part B premium will be or was deducted from your Social Security benefits in November 2019 through January 2020;
  3. You do not already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility;
  4. And, you do not receive a Cost of Living Adjustment (COLA) large enough to cover the increased premium. COLA is additional income given to Social Security recipients to protect against inflation decreasing the benefit’s purchasing power. The COLA in 2020 will be 1.6% of your Social Security benefit.

The COLA in 2020 is likely to cover the full Part B premium for most people. If your COLA is large enough to cover the full amount of your increased premium, you will not be held harmless and your premium will increase to $144.60.

The hold harmless provision does NOT protect you if:

  1. You are new to Medicare in 2020. Hold harmless does not apply to you because you have not been enrolled in Medicare Part B long enough to qualify.
  2. You are subject to IRMAA.
  3. You are enrolled in a Medicare Savings Program (MSP). However, the MSP should continue paying for your full Part B premium.
  4. You were enrolled in a Medicare Savings Program in 2019 but lost the program because your income increased or you failed to recertify.

Note: If you qualify for the hold harmless provision but pay a Part B late enrollment penalty, the penalty will not be waived, and it may increase. This is because the penalty will be calculated based on the new, higher premium—even if you are not paying that higher amount.

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Email Robert.Powell@maven.io

Question

I receive a very small SSA (Social Security Administration) benefit because the bulk of my retirement income comes from a state pension fund in the state where I worked for over 20 years. However, I do have a tiny SSA monthly benefit which, unfortunately, has become smaller since January, 2017. For 2 years ( 2014-2016) my monthly benefit minus Medicare Part B premium was about $140. Then, in January of 2017, my benefit was reduced to $118. I was told at that time when I inquired at the SSA office near me that a change had been implemented and I had to pay the full Medicare part B premium.

I did online research at SSA.gov which stated: "The increase in Medicare premiums cannot cause the Social Security benefit to go down."

Since I am having absolutely no success discussing this with the SSA agents on the phone due to the fact that they are unaware of this provision, I am getting frustrated. Do you have any suggestions as to who I might contact in order to try to resolve this issue?

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