Social Security hold harmless provision re Medicare premium increases

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mptfan
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Social Security hold harmless provision re Medicare premium increases

Post by mptfan » Thu Sep 24, 2015 11:20 am

I learned something new today... apparently Social Security has a "hold harmless" provision that protects social security retirement benefit recipients from experiencing a net decline in social security benefits as a result of an increase in Medicare premiums if the social security recipients have the Medicare premiums withheld from their social security payment.

http://www.investmentnews.com/article/2 ... e-premiums

If this is true, then this is one (albeit small) factor that mitigates against delaying claiming social security benefits beyond the age of 65 when Medicare eligibility kicks in. For example, it is likely that there will be no social security COLA increase next year due to low inflation this year, and it is likely that there will be an increase in Medicare premiums, so someone who is currently claiming social security retirement benefits and having their Medicare premiums withheld from their payment would not have to pay the increase in Medicare premiums because they are protected from a net reduction in their retirement benefits. By contrast, someone who is age 65 or older (and not yet 70) and is delaying claiming social security benefits would have to pay the increase Medicare premium.

To be clear, I am not advocating against delaying social security, I am simply making people aware of another factor to be considered in the decision that I have not previously seen discussed on this board.
Last edited by mptfan on Thu Sep 24, 2015 2:44 pm, edited 3 times in total.
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cheese_breath
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Re: Social Security hold harmless provision re Medicare premium increases

Post by cheese_breath » Thu Sep 24, 2015 11:48 am

I believe only the Medicare subscribers whose premiums are withheld from their social security payments qualify for the hold harmless provision. Those who pay their premiums by other means such checks or bank account withdrawals may see premium increases.
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pshonore
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Re: Social Security hold harmless provision re Medicare premium increases

Post by pshonore » Thu Sep 24, 2015 12:04 pm

Already discussed extensively in this thread

viewtopic.php?f=2&t=170153

mptfan
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Re: Social Security hold harmless provision re Medicare premium increases

Post by mptfan » Thu Sep 24, 2015 12:15 pm

cheese_breath wrote:I believe only the Medicare subscribers whose premiums are withheld from their social security payments qualify for the hold harmless provision. Those who pay their premiums by other means such checks or bank account withdrawals may see premium increases.

I amended my post accordingly.
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munemaker
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Re: Social Security hold harmless provision re Medicare premium increases

Post by munemaker » Tue Sep 12, 2017 9:02 pm

Old thread, but I have a related question.

Scenario: Say I am planning to take SS (near the max) at 70. My DW was a stay-at-home mom and worked part time. She qualifies for SS on her own record with a PIA of about $6,000/year. Say she takes her SS at age 65 when I would be 66, and I take spousal on hers. That way we could (hopefully) both use the hold harmless provision while deferring my SS to age 70.

Will this work?

The Wizard
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Re: Social Security hold harmless provision re Medicare premium increases

Post by The Wizard » Tue Sep 12, 2017 9:11 pm

munemaker wrote:
Tue Sep 12, 2017 9:02 pm
Old thread, but I have a related question.

Scenario: Say I am planning to take SS (near the max) at 70. My DW was a stay-at-home mom and worked part time. She qualifies for SS on her own record with a PIA of about $6,000/year. Say she takes her SS at age 65 when I would be 66, and I take spousal on hers. That way we could (hopefully) both use the hold harmless provision while deferring my SS to age 70.

Will this work?
Depends entirely on your combined MAGI.
If less than $170k, then should work...
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munemaker
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Re: Social Security hold harmless provision re Medicare premium increases

Post by munemaker » Wed Sep 13, 2017 8:45 am

The Wizard wrote:
Tue Sep 12, 2017 9:11 pm
munemaker wrote:
Tue Sep 12, 2017 9:02 pm
Old thread, but I have a related question.

Scenario: Say I am planning to take SS (near the max) at 70. My DW was a stay-at-home mom and worked part time. She qualifies for SS on her own record with a PIA of about $6,000/year. Say she takes her SS at age 65 when I would be 66, and I take spousal on hers. That way we could (hopefully) both use the hold harmless provision while deferring my SS to age 70.

Will this work?
Depends entirely on your combined MAGI.
If less than $170k, then should work...
I will be doing Roth conversions, but plan to keep MAGI under $170K. Always searching for ways to optimize. Thanks for responding.

ChrisC
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Re: Social Security hold harmless provision re Medicare premium increases

Post by ChrisC » Wed Sep 13, 2017 9:56 am

munemaker wrote:
Wed Sep 13, 2017 8:45 am
The Wizard wrote:
Tue Sep 12, 2017 9:11 pm
munemaker wrote:
Tue Sep 12, 2017 9:02 pm
Old thread, but I have a related question.

Scenario: Say I am planning to take SS (near the max) at 70. My DW was a stay-at-home mom and worked part time. She qualifies for SS on her own record with a PIA of about $6,000/year. Say she takes her SS at age 65 when I would be 66, and I take spousal on hers. That way we could (hopefully) both use the hold harmless provision while deferring my SS to age 70.

Will this work?
Depends entirely on your combined MAGI.
If less than $170k, then should work...
I will be doing Roth conversions, but plan to keep MAGI under $170K. Always searching for ways to optimize. Thanks for responding.
Just curious, have you priced whether it makes better sense for you to do Roth conversions even if you tripped over into IRMAA land with MAGI above $170K and can't be under the hold harmless provision? Intuitively, it seemed to us that doing an extra $30K in conversions and winding up in the first tier of extra Medicare B premiums was more beneficial to us than saving $650 (in IRMAA premiums) or savings resulting from hold harmless. We're thinking of doing even greater levels of conversions in the future -- staying below $170K does not seem financially wise to us when higher levels of conversions might yield better financial efficiency.

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