impact of "hold harmless" on SS

[GrayHare]

I have not seen discussed here the following argument for starting SS earlier. By claiming early you prevent Medicare costs from rising more than the SS COLA. If you instead wait to start SS, you are exposed to uncapped Medicare increases, and in effect you end up paying for those who started SS sooner.

"And for those people aged 65-69 who are paying Medicare premiums but have intentionally deferred collecting Social Security in order to receive
larger payments later - they have no 'hold harmless' protection. What is much worse, however, is that they must 'pick up the tab' for
everyone who is protected by 'hold harmless', including those in their age group who did choose to collect Social Security."

The full text is wordy but presents interesting arguments. http://danielamerman.com/va/BenefitAge.html

 

[pb4uski]

Good point but for us there is another aspect... once we start SS our ability to continue to do low cost Roth conversions goes away or is severely diminished.

 

[audreyh1]

Someone here has brought up and illustrated this issue several times.

Definitely something to review as we reach FRA.

 

[Independent]

Note that the article also says:

"As an example, about 30% of current Medicare beneficiaries just barely dodged this bullet in late 2015 when a last minute budget fix averted what would have otherwise been up to a 52% increase in Medicare Part B premiums that was scheduled to take place on January 1, 2016."

So the "pick up the tab for everyone else" didn't happen because Congress stepped in and overrode that provision of the law.

I know we're not supposed to speculate on future Congressional actions on this board, so I won't....

(I remember this well because my wife started SS at age 66, I deferred to 70, and we were on opposite sides of the fence in 2016.)

 

[Fedup]

It went up for my husband in 2016, he took SS at 64.5. I think he pays $128 for Medicare Premium.

 

[athena53]

I'm not counting on "hold harmless" anyway; if you're subject to the IRMAA Medicare B surcharge (Income-Related Monthly Adjustment Amount) you get stuck with the full premium increase.

I do have to remember this as ammunition when random people whine on FB about not getting a COLA increase in their SS. In reality, they got a COLA increase (OK, not much of one) but it was wiped out by the Medicare B increase. What they forget is that, were it not for "hold harmless", their SS benefits net of Medicare premiums would have decreased. They essentially got a break on the cost of their Medicare B coverage. They just can't see it.

 

[pb4uski]

Yeah... math is hard.

 

[audreyh1]

I'm not counting on "hold harmless" anyway; if you're subject to the IRMAA Medicare B surcharge (Income-Related Monthly Adjustment Amount) you get stuck with the full premium increase.

I do have to remember this as ammunition when random people whine on FB about not getting a COLA increase in their SS. In reality, they got a COLA increase (OK, not much of one) but it was wiped out by the Medicare B increase. What they forget is that, were it not for "hold harmless", their SS benefits net of Medicare premiums would have decreased. They essentially got a break on the cost of their Medicare B coverage. They just can't see it.

I was wondering about that. We'll be in the surcharge group, so I guess hold harmless wouldn't help us anyway if we started SS at FRA!!

 

[CRLLS]

For those of us NOT subject to the IRMMA, but subject to hold harmless provisions, Medicare Part B premiums may catch up to those not covered by HH depending on the amount of your SS benefit and it's COLA, related to the amount of Medicare premiums and their annual increase. In years where your COLA increases in $$ increase faster than the Medicare $$, medicare will start making up the differences until you are whole. It is not an absolute certainty. But within reason, it could happen relatively quickly. You will have benefited for those few years though.