Each year, the Centers for Medicare & Medicaid Services (CMS) set the following year’s Part B premium. In 2021, the Part B base premium will be $148.50. Most people will pay this amount. A small number of people pay a premium that is lower than the base premium. These people are protected by the hold harmless rule.
The hold harmless rule protects you from having your previous year’s Social Security benefit level reduced by an increase in the Part B premium so long as:
- You are entitled to Social Security benefits for November and December of the current year (2020);
- The Medicare Part B premium will be or was deducted from your Social Security benefits in November 2020 through January 2021;
- You do not already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility;
- And, 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. The COLA in 2021 will be 1.3% of your Social Security benefit.
The COLA in 2021 is likely to cover the full Part B premium for most people. If your COLA is large enough to cover the full amount of your increased premium, you will not be held harmless and your premium will increase to $148.50.
The hold harmless provision does NOT protect you if:
- You are new to Medicare in 2021. Hold harmless does not apply to you because you have not been enrolled in Medicare Part B long enough to qualify.
- You are subject to IRMAA.
- You are enrolled in a Medicare Savings Program (MSP). However, the MSP should continue paying for your full Part B premium.
- You were enrolled in a Medicare Savings Program in 2020 but lost the program because your income increased or you failed to recertify.
Note: If you qualify for the hold harmless provision but pay a Part B late enrollment penalty, the penalty will not be waived, and it may increase. This is because the penalty will be calculated based on the new, higher premium—even if you are not paying that higher amount.