CMS has announced that Part B premiums will rise in 2017. 70% of Medicare beneficiaries will have their premiums increase from ~$105/month to $110/month. However, the remaining 30% will face a 10% increase in their base premiums. The 6% of beneficiaries who pay a high income surcharge will pay an additional 10% increase in that surcharge, on top of their Part B premiums.
All Social Security recipients will receive a 0.3% cost of living increase for 2017. A meager increase to say the least, but better than getting nothing at all, which was the case in 2016.
70% of recipients fall under a hold harmless provision implemented back in 1987 which is designed to keep their net checks from diminishing. So for those retirees who have their Part B premiums deducted from their Social Security checks, the premium cannot go up in any given year by more than the extra dollars that they're receiving as a cost of living adjustment.
The remaining 30%, who are well off and who don't have their premiums withheld from their SS checks, are the unlucky recipients of the rising costs that are deflected from those that fall under the hold harmless provision.
The numbers sound abysmal, but in light of what could have happened, they're not nearly as exorbitant as they could have been. Last year Congress voted to keep the increase to 16% for the 30% who pay the surcharge (rather than the proposed 52%). Next year's increase was proposed to be 22% which Congress has knocked back to 10%.
The costs are staggering, and the issue isn't going to resolve itself anytime soon as seniors continue to live longer, and the cost of care continues to climb.
By Carolyn Portanova
Carolyn Portanova is the Director of Marketing at The Brokerage Resource and has been with the firm since 2012.