Last week, the Social Security Administration announced that there will be a 2% cost-of-living adjustment (COLA) to Social Security benefits in 2018. However, some people with Medicare will not see the full two percent increase in their monthly benefits. Those who paid less than the standard $134 Part B premium in 2017 had lower costs because they were protected by the hold harmless provision.

This provision prevents an individual’s Social Security benefit from going down from one year to the next as a result of Medicare premium increases. Many people were held harmless in 2016 and 2017 because the COLAs for those years (0% and 0.3%) were not large enough to cover the full amount of the increased Part B premium ($134). For these individuals, the Part B premium increased the same amount as the increase in their Social Security benefit. The average premium for individuals protected by hold harmless in 2017 is $109.

In 2018, the two percent COLA is likely to be enough to cover the difference between a person’s previous premium and the standard Part B premium, which is expected to stay at around $134 per month. In this case, the hold harmless provision will not affect premiums and most people will pay the standard premium. If a person’s benefit does not increase enough for them to pay the $134 without their Social Security benefit decreasing, the hold harmless provision will limit the Part B premium increase to the amount their Social Security benefit increased.

Here is an example of how this will work for someone whose Social Security award in 2017 is $1,300 a month. If someone with Medicare pays the average $109 Part B premium in 2017, their check is $1,191 after the premium is deducted. In 2018, their benefit will increase by $26 to $1,326, and their premium will increase by $25 to $134. Their Social Security check, after the premium deduction, will be $1,192.

People who paid $134 for Part B in 2017 (including people who were new to Medicare in 2017) will have the same 2% increase to their Social Security benefits, but no increase in Part B premiums if the 2018 premium stays the same. These individuals will see an increase to their Social Security check after the premium is deducted.

Everyone should look at their Social Security statement for personalized information about their benefit and premium amounts.

Once the Part B premium for 2018 is announced, we will update the hold harmless page on Medicare Interactive with more details about how the COLA and the Part B premium affect Social Security benefits for people with Medicare in 2018.