Low Social Security cost-of-living adjustment keeps Medicare premiums lower for most

Seventy percent of people with Medicare are protected from a large rise in premiums next year because of the low cost-of-living adjustment for Social Security benefits, leaving the rest to absorb higher health care costs.

The standard monthly premium will rise 10% to $134 a month for 30% of beneficiaries, including high earners, according to a statement Thursday from the Centers for Medicare and Medicaid Services. The remaining beneficiaries will pay an average premium of $109, which is about 4% higher than the $104.90 paid the past four years.

The larger group was protected from a bigger increase because the cost-of-living adjustment for Social Security benefits next year is so low that it triggered a “hold harmless” provision designed to protect seniors. The Medicare Part B premiums, which cover doctors’ bills and outpatient services, are usually deducted from retirees’ Social Security payments.

“Because of the ‘hold harmless’ provision covering the other 70% of beneficiaries, premiums for the remaining 30% must cover most of the increase in Medicare costs for 2017 for all beneficiaries,” the Centers for Medicare and Medicaid Services said.

The Social Security Administration announced last month that the cost-of-living adjustment, commonly referred to as COLA, will be just 0.3% in 2017. It is the fourth consecutive year in which COLA increases fell below 2%.

About 30% of Medicare beneficiaries aren’t covered by the “hold harmless” provision, according to the Centers for Medicare and Medicaid Services.

The group includes those who don’t receive Social Security benefits, as well as those who are directly billed for their premium or enroll for the first time in 2017. Beneficiaries dually eligible for Medicaid and have their premium paid by state Medicaid agencies aren’t subject to the provision. Nor are high earners, who make up about 5% of people with Medicare, and pay so-called income-related premiums.

Beneficiaries with higher incomes have paid higher Medicare monthly premiums since 2007, according to the statement. In 2017, single retirees with incomes above $85,000 and married couples with incomes above $170,000 will pay monthly surcharges ranging from an extra $53.50 to $294.60 in addition to the standard monthly Part B premium of $134 per month.

— Mary Beth Franklin contributed to this article.