Last Thursday Medicare announced its changes for deductibles and Part B premiums for 2017. Bad news first – premiums are going up for everyone (both new and all current enrollees, unlike last year where 70% of Medicare recipients were protected by the “hold harmless” provision) next year. The good news is that the increase will not be at the worst-case-scenario projected by the Medicare trustees earlier this summer.

Rather than the originally projected 22% increase, the government instead announced that Part B premiums will rise by only a little less than half of that, 10%. A group of ~6.5 million Medicare beneficiaries - which includes people 65 and over who do not yet collect Social Security benefits, higher-income retirees subject to a premium surcharge, and those who will be enrolling in Part B for the first time in 2017 - will be affected by this increase. Part B premium will rise to $134/month from $121.80.

For the ~70% majority who are already receiving Social Security and pay for their Part B premium directly from their benefit, the increase will be much smaller. This group is protected under the so-called “hold harmless” provision, which prohibits the dollar increase to Part B premiums from exceeding the dollar increase in their Social Security checks.

Social Security already announce their Cost of Living Adjustment for next year to be 0.3%, on average a ~$5/month increase to benefits. Part B premiums for those protected by the “hold-harmless” provision are rising from $104.90 to $109, within that $5/month adjustment. Essentially Social Security’s 2017 COLA will be swallowed up by higher Part B premiums for most.

Deductibles are also rising in 2017:

• Part B (which covers doctor appointments and other outpatient services) annual deductible will rise to $183 from$166
• Part A (which covers inpatient hospitalizations, skilled nursing care, and some home health services, and is free to most beneficiaries) annual deductible increased to $1,316 from $1,288