Medicare and Social Security for 2016

Clearing up some of the confusion…

by Andrea Bulen

If you are currently receiving Social Security benefits you have likely heard that you will NOT be receiving a raise next year. However, if you are also enrolled in Medicare Part B this means that Medicare premiums will NOT increase next year. This is due to a policy known as the "hold harmless" rule, which states that Social Security benefits payments cannot decrease due to rising Medicare Part B premiums.

As long as you had Medicare in 2015 and were having your Medicare premiums taken out of your Social Security payment directly, you should qualify for the "hold harmless" rule and not pay increased premiums.

NOTE: Make sure that you pay your Medicare premiums directly from your Social Security check to qualify for the hold harmless rule.

However, for those retirees just starting on Medicare next year and for those retirees on Medicare, but not yet drawing Social Security, you will have to pay an increase, which is projected to be roughly $55/month.

If you turn 65 next year and this will be your first year on Medicare, there is nothing you can do about this increase. It is important to note that this increase will not be forever, and premiums will likely come down in the future.

If you are already on Medicare, but not yet drawing Social Security you could potentially avoid this increase by starting your Social Security benefit before the end of 2015. However, in many cases drawing Social Security earlier than planned just to avoid this increase is not prudent.

We have reviewed this situation for each of our clients, but if you would like to discuss your options further, please call our office and we'll be happy to work through the specifics of your situation.

-Andrea