As was widely expected, the Centers for Medicare and Medicaid Services announced that the 2018 Medicare Part B premiums will increase for most Medicare enrollees from $109 per month to $134 per month, an increase of 23%. It will be the largest increase in Medicare Part B premiums in five years.
The main reason for the large increase, was that there had been little in the way of Social Security cost of living increases over the last several years, including 2016's no increase to Social Security and 2017's 0.3% increase. Under the Hold Harmless provision of Social Security that is designed to protect retirees from seeing a net decline in their benefits due to higher Medicare Part B premiums, this had limited the amount of increase that had occurred.
This means that many of our clients who are receiving Social Security and Medicare benefits will largely see the 2% increase in Social Security benefits that was announced in October by the Social Security administration, largely offset by their higher Medicare premiums. For many of our clients, the 2% cost of living adjustment in Social Security benefits will give them an increase of anywhere from $25 to $50 a month of additional benefits, which will then be reduced by the $25 increase in Medicare Part B premiums. We want to keep you up to date, as many of our clients rely on both Social Security and Medicare as foundational programs to help create retirement income and health care benefits for them and their spouse.
As always, please let us know if you have questions about how these changes affect your retirement and investment plans. We at Impel Wealth Management want to help our clients continue to "Move Life Forward".