Will my Social Security benefit decrease if the Medicare premium increases?                             

For most Social Security recipients, no. That’s due to the “hold harmless” provision of the Social Security Act, which prevents benefit payments from going down because Medicare Part B premiums go up.

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“Hold harmless” applies to people who pay the "standard" premium for Part B (the portion of Medicare that covers outpatient treatment such as doctor visits) and have it deducted from their Social Security benefits. Roughly 70 percent of Medicare enrollees fall into that category.

When the standard Part B rate rises, as it does most years, people in this group get what amounts to a discount on premiums if paying the full cost would reduce the dollar amount of their Social Security benefit from one year to the next.

But … rising Medicare premiums can prevent your benefits from going up, or going up as much as they otherwise would, by eating into increases from cost-of-living adjustments (COLAs). 

For example, in 2022, the average Social Security retirement benefit increased by $92 a month due to a 5.9 percent COLA. There also was a significant jump in the standard Part B premium, from $148.50 a month to $170.10. That effectively trimmed $21.60 a month from the cost-of-living increase but did not wipe it out for most beneficiaries.

There will be no such offset in 2023, with the standard Part B rate set to decrease to $164.90 a month and Social Security benefits increasing by 8.7 percent (about $146 a month for the average retirement benefit) due to the largest COLA in more than 40 years. 

If the dollar amount of the Medicare premium hike did exceed that of the Social Security COLA, beneficiaries covered by "hold harmless" (see below) would pay less than the standard Part B rate to ensure their monthly benefit payment doesn't go down. That happened in 2017, when a miniscule 0.3 percent COLA was more than offset by the increase in Medicare premiums.

Keep in mind

• “Hold harmless” does not apply if you: 
  • Pay Medicare directly for coverage.
  • Pay more than the standard Part B rate because Social Security considers you a “higher-income beneficiary.”
  • Are also enrolled in Medicaid and receive a state subsidy to pay your Medicare premium.
• The provision does not apply in the year you initially enroll in Part B, regardless of how you pay your premium.