Social Security Nearly Flat While Medicare Costs Could Jump 22%

Some people relying on Social Security and Medicare could face another year of higher Medicare costs with nearly flat Social Security income. The government recently announced that Social Security beneficiaries will receive a 0.3% cost-of-living adjustment (COLA) to their monthly checks in 2017. That amounts to only a $5 increase in the average retired beneficiary’s check, to $1,360 per month. The Centers for Medicare and Medicaid Services (CMS) has not released 2017 Medicare rates, but the Medicare Trustees Report projected that a third of Medicare’s 56 million beneficiaries could see their Medicare Part B premiums jump 22% next year, to $149 a month. (Those experiencing this increase would be people on Medicare but not yet taking Social Security benefits and current enrollees paying higher premiums because they earn more.)

CMS projects that the remaining 70% of Medicare recipients — who now pay $104.90 per month for Part B — will see a “small increase” in Part B premiums, according to USA Today.

CMS is expected to release 2017 Part B rates in November. The Part B increase isn’t the only Medicare cost expected to increase. According to a recent analysis of 2017 Part D Prescription Drug plans by the Kaiser Family Foundation, the average Part D premium (weighted by 2016 plan enrollment) is projected to increase by 9% from 2016, to $42.17 per month — assuming that enrollees stay in their current plan. The analysis shows that Part D plan premiums will continue to vary widely across plans, with average premiums ranging from $16.81 to $71.66 per month.

Plus, all enrollees may see a projected Part B deductible increase from $166 to $204. “These changes are reminders of the importance of reviewing your Medicare health insurance and prescription drug coverage each year during open enrollment,” said Brian Hickey, vice president of Insuractive^®. “Plans and formularies can change from year to year, and if you don’t catch it, you can end up paying more. When Social Security’s cost-of-living adjustments don’t keep pace with climbing Medicare costs, it can be a real burden financially.”

Open Enrollment, which runs Oct. 15 to Dec. 7, is when you can make changes to your Medicare Advantage or Medicare Part D Prescription Drug coverage for the coming year. Because insurance plans can change each year, it’s important to review your plans annually at this time to identify any changes that could cost you more money or impact your coverage. You may also want to review your Medicare Supplement health insurance plan each year, because those premiums also can change.

The paltry 2017 COLA adjustment also follows a year in which beneficiaries received no increase for inflation. Just as in 2016, the meager COLA again will trigger Social Security’s “hold harmless” rules. Under the rules, beneficiaries’ Medicare charges can’t increase by more than their Social Security. Most people who have their premiums deducted from their Social Security checks are protected by the rule. Because there was no COLA in 2016, most people saw no increase in their Part B premium. But for those who did, Part B premiums were set to skyrocket an unprecedented 52%. A last-minute bipartisan budget deal softened the increase to about 16%.

“All of these changes can be overwhelming,” Hickey said. “Have a licensed insurance agent who specializes in Medicare review your current coverage to make sure you fully understand the costs, any plan and premium changes and areas for potential savings. You’ll also want to make sure you get the coverage you need. The lowest-priced plan may not always be the best plan for your medical situation.”

If you’d like a free review of your Medicare health insurance and prescription drug coverage before open enrollment ends Dec. 7, call Medicare MarketPlace^® to speak to a Licensed Insurance Agent at 1-800-639-0781.

Or, fill out this form if you’d like us to contact you to review your existing coverage and compare other plans.