The Hold-Harmless Rule: Why Medicare’s 2027 Premium Hike Can’t Touch Some Retirees’ Social Security Checks

Quick Read

• The hold-harmless rule bars Medicare Part B premium increases from shrinking Social Security checks, protecting beneficiaries from a year-over-year benefit decline.

• Retirees with small benefits face the biggest risk, since a premium jump can erase a 3.6% COLA; a $300 benefit gains only about $11.

• Medicare typically announces the 2027 Part B premium later in November, and open enrollment runs through Dec. 7 for switching Part D or Advantage plans.

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When the Social Security Administration announced that benefits would receive a 3.6% cost-of-living adjustment (COLA) in 2027, many people were happy with the update. And if you’re one of them, you may be thinking, “Great! Now I can go ahead and calculate my 2027 raise.”

Well, not so fast. If you’re enrolled in Medicare, you may be aware that your Part B premiums are paid out of your Social Security benefits automatically. You may also be painfully aware that the cost of Medicare Part B tends to increase from one year to the next.

Now here’s the scary part. If your Social Security benefit is on the small side and the cost of Medicare Part B rises substantially, it’s conceivable that your entire COLA could get wiped out in 2027. But thankfully, your Social Security benefit cannot shrink from one year to the next thanks to a long-standing rule.

How the hold-harmless rule works

There have been years when Social Security’s COLA has been much smaller than 3.6%. During times like that, even a modest increase in the cost of Medicare Part B can wipe out a COLA completely.

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The typical senior on Social Security does not have to worry about that happening in 2027. The average monthly benefit is slightly less than $2,100, and the typical retirement check is expected to increase by $75 once the 3.6% COLA takes effect in January.