What is Medicare’s “Hold Harmless” Rule?

As you may know, Medicare Part B (medical insurance) covers doctors, outpatient care, and medical equipment. For those who collect Social Security benefits, these premiums are deducted from monthly Social Security payments.

Social Security has a provision called the “hold harmless” rule, which means that Social Security payments cannot decrease from one year to the next. When the Part B premiums increase each year, they are funded by Social Security’s cost-of-living adjustment (COLA).

Are You Protected Under the “Hold Harmless” Rule?

The “hold harmless” rule protects Social Security recipients from paying higher Part B premium costs so long as:

1. You were entitled to Social Security benefits for November and December of the previous year;
2. The Medicare Part B premium will be or was deducted from your Social Security benefits in November 2018 through January 2019;
3. You don’t already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility; and
4. You do not receive a Cost of Living Adjustment (COLA) large enough to cover the increased premium. COLA is additional income given to Social Security recipients to protect against inflation decreasing the benefit’s purchasing power.

Roughly 30 percent of Medicare Part B beneficiaries are not subject to the “hold harmless” rule. This includes individuals who:

• Do not receive Social Security benefits
• Are billed directly for their Part B premium
• Are eligible for both Medicaid and Medicare and have their premium paid by state Medicaid agencies
• Will enroll in Part B for the first time in the coming year
• Pay a premium related to their income

CMS Acting Administrator Andy Slavitt said, “Medicare’s top priority is to ensure that beneficiaries have affordable access to the care they need. We will continue our efforts to improve affordability, access, and quality in Medicare.”

Reach out to us at 877.222.1942 with questions you have regarding your Part B premium or Medicare in general. We are happy to advise you.

If you are not yet a client, please email us at advice@retiremed.com or call us at 937.915.3563.