Millions of seniors rely on Medicare to cover their healthcare needs. And while Medicare Part A, which covers hospital visits, is generally free to seniors, Part B, which covers doctor visits and diagnostics, comes at a premium that enrollees must pay.

And make no mistake about it: Those premiums have been going nowhere but up, and they are expected to continue to do so in the coming years. Last year, Medicare trustees forecast that Part B premiums would increase about 5% on an annual basis over the next 10 years. The Centers for Medicare and Medicaid Services, meanwhile, recently estimated that spending would increase 7.4% per year, on average, over the next decade.

Senior man sitting in bed, holding his head

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But Social Security's cost-of-living adjustments, or COLAs, are only expected to increase 2.4% on average during that time. This means that Medicare premium percentage increases will outpace COLAs significantly, leaving seniors in a pretty bad spot.

Thankfully, all is not lost. Thanks to Social Security's "hold harmless" provision, recipients cannot face an outright drop in net benefits due to an increase in Medicare premiums. In other words, if the cost of Medicare Part B rises $30 per month in a given year, and Social Security's COLA only raises a person's monthly benefits by $25, then Part B premium increases would max out at $25 for that person during that year, thereby taking that person off the hook for the remaining $5. But while the "hold harmless" clause offers some degree of protection for seniors, it's by no means a perfect solution to the problem at hand.

Seniors need those COLAs

The purpose of Social Security COLAs is to enable seniors to retain their buying power in the face of inflation. Unfortunately, those COLAs have done a poor job in recent years of allowing retirees to keep up with their expenses, and healthcare is no exception. Furthermore, because Medicare premiums have been increasing at such a rapid rate, they've been virtually wiping out the COLAs so many seniors have been looking forward to.

Case in point: In 2018, Social Security recipients saw a 2% COLA, the largest in six years. But because Medicare Part B premiums increased simultaneously, the bulk of seniors saw no additional income out of Social Security.

The problem, however, is that most seniors need that extra money in hand to cover their expenses, even if we're talking about a mere $25 or so more per month. The fact that Medicare eats up those COLAs from the get-go leaves seniors at an ongoing disadvantage.

Not everyone is protected from Medicare increases

While the "hold harmless" provision is indeed a double-edged sword, it doesn't fully solve the problem of protecting seniors from Medicare premium hikes. That's because seniors who are new to Medicare and aren't yet collecting Social Security are not eligible for that provision -- or, rather, it simply doesn't apply to them because there are no benefits to protect. And let's be clear: Filing for Social Security at the same time as Medicare isn't the answer here, as that would mean taking benefits ahead of full retirement age and slashing them substantially as a result.

What is the answer? It could lie in a much bigger COLA, but that's not something seniors should count on going into 2019. Still, we can all cross our fingers and hope that lawmakers enact a solution to a persistent problem that doesn't seem to be going away. Otherwise, an untold number of seniors will continue to struggle financially for many years to come.

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