Hold Harmless Applicablity to Medicare?

[Youngster]

If, as is likely, Medicare rate rises significantly in 2016, I was wondering whether the hold harmless SS provision would apply in the following situation.

Spouse to start collecting SS in early 2016, maybe as early as January 1, 2016. Spouse will be 65 next October (2016). Will the hold harmless provision apply to spouse so as to make Part B Medicare monthly premium the current amount of $104.90? Or, will the amount be the increased amount of around $150? We are in the under $170,000 joint filing amount.

Another related question here. If the amount is the increased amount of around $150, will that amount only be paid for the last 3 months of 2016, and if there is a COL increase for 2017, will the premium amount go down to around $110 per month?

 

[MBSC]

Spouse to start collecting SS in early 2016, maybe as early as January 1, 2016. Spouse will be 65 next October (2016). Will the hold harmless provision apply to spouse so as to make Part B Medicare monthly premium the current amount of $104.90? Or, will the amount be the increased amount of around $150? We are in the under $170,000 joint filing amount.

The higher amount of ~$159 will apply. To be eligible for the 2016 hold harmless provision, the beneficiary must:

1) Be entitiled to SS benefits during November and December 2015 and;

2) Have the Medicare Part B premium deducted from SS benefits in December of the preceding year (2015) and January of the current year (2016). The discrepancy between months of entitlement and months of check is due to the program design that has the beneficiary receiving the check for last month's benefits in the current month, e.g. December's benefits come in January.

Another related question here. If the amount is the increased amount of around $150, will that amount only be paid for the last 3 months of 2016, and if there is a COL increase for 2017, will the premium amount go down to around $110 per month?

Yes, the hold harmless provision would apply in 2017 due to the above criteria being met. However, the 2017 premium with COLA is currently projected at $120.70.

Those already held harmless and paying $104.90 in 2015 and 2016 will pay the lessor of $120.70 in 2017 or the amount covered by the COLA.

 

[Youngster]

Thank you for the extremely informative response. Per my understanding then, the premium would go down to around $120.70 on 1/1/17 if there is a COLA for 2017, right? What happens if there is again no COLA for 2017?

 

[Peter]

I'm 68 but have delayed taking SS. Also currently on spouse's company health insurance.
If I was to sign up for SS and Medicare, both starting December 2015, would that qualify me for the hold harmless provision?

 

[MBSC]

Thank you for the extremely informative response. Per my understanding then, the premium would go down to around $120.70 on 1/1/17 if there is a COLA for 2017, right? What happens if there is again no COLA for 2017?

You're welcome. Yes, the premium would be ~$120.70 if there is a COLA for 2017. If there is no 2017 COLA, beneficiaries would fall into one of three categories:

1. You paid ~$159 during 2016 but became eligible for 2017 hold harmless so you continue to pay the same ~$159 during 2017. Your spouse falls into this category.

2. You paid the hold harmless rate of $104.90 in 2016 and continue to pay that rate in 2017.

3. You are not eligible for the 2017 hold harmless provision and pay something north of ~$159 during 2017.

The SSA currently estimates a 3.1% COLA for 2017.

I'm 68 but have delayed taking SS. Also currently on spouse's company health insurance.
If I was to sign up for SS and Medicare, both starting December 2015, would that qualify me for the hold harmless provision?

Starting in December, 2015 would be too late. You would need to enroll in SS and Medicare early enough to receive services in November, 2015 and receive the corresponding SS payment (with Part B withheld) during December. Remember that the Part B increase is a temporary "spike" and not permanent.

 

[Youngster]

Thanks again, SCGamecock. Sounds like there will likely be a COLA in 2017, per your link. 3.1% is a nice number.