Tens of millions of Americans rely on Medicare to provide healthcare coverage in retirement. For retirees living on a fixed income, it's important to be able to get affordable protection against healthcare costs that could otherwise be financially devastating.
Some parts of Medicare provide for eligible participants not to have to pay an additional premium to get service, such as hospital and inpatient care coverage under Medicare Part A. But in order to get Medicare coverage for medical expenses like doctor visits and outpatient care, most participants have to pay monthly premiums for Medicare Part B. And like so many things related to healthcare, the cost of those monthly Part B premiums has been on the rise over the past several years.
Data source: Centers for Medicare and Medicaid Services. Chart by author.
Medicare participants hope that they might get another break like they did in 2012, when premiums made an abrupt reversal, falling by more than $15 per month after having seen a dramatic increase in 2010. Unfortunately, the Centers for Medicare and Medicaid Services project that premiums will at best stay flat going forward, with long-term estimates suggesting further cost increases over time.
The only saving grace for some Medicare participants since 2016 has been what's known as the hold harmless provision, which prevents monthly Part B premiums from rising for those whose Social Security cost of living adjustments (COLAs) are insufficient to cover the added cost. That provision helped many from seeing the big Medicare increases that took effect for new participants. However, the reprieve was only temporary, and many retirees have lost most of their scheduled Social Security COLAs to the higher Medicare premium costs.
