by Barry L Weller, EA
The Social Security cost-of-living adjustment for 2018 is the largest since 2012. More than 61 million Americans will receive a 2% COLA in their Social Security benefits. This increase will begin in January 2018. However, all or most of the increase, which is roughly $25 for the typical recipient receiving an average $1,250 monthly benefit, will be eaten up by an increase in Medicare Part B premium. Soon, the Centers for Medicare & Medicaid Services is expected to announce the Medicare Part B premiums for 2018. Medicare Part B premiums, which cover outpatient medical care such as doctor visits and lab tests, will likely remain stable at about $134 a month for 2018. But that monthly premium is substantially higher than what many Medicare recipients currently pay. The “held harmless” provision in the law prevented increases in Part B premiums if the increase would reduce their Social Security benefits. Since Social Security benefits did not rise at all in 2016 and increased just 0.3% in 2017, 70% of Medicare recipients (those with a modified adjusted gross income of less than $85,000 for individuals and $170,000 for couples who have their Medicare premiums deducted from their Social Security benefits) did not pay the $134 a month for Part B. They’ve been paying about $109 per month on average.
Barry L Weller, EA is the president of Barry Weller & Associates with offices at 19 N Reading Ave, Boyertown, PA 19512 Phone (610) 367-8280 He is an enrolled agent, licensed to represent taxpayers before the IRS. (updated 11/11/2017)