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In 2018, Social Security recipients will get their largest cost of living increase in benefits since 2012, but the
additional income will likely be largely eaten up by higher Medicare Part B premiums.
Cost of living increases are tied to the consumer price index, and an upturn in inflation rates and gas prices means
recipients get a small boost in 2018, amounting to $27 a month for the typical retiree. The 2 percent increase is
higher than last year’s .3 percent rise and the lack of any increase at all in 2016. The cost of living change also
affects the maximum amount of earnings subject to the Social Security tax, which will grow from $127,200 to

The increase in benefits will likely be consumed by higher Medicare premiums, however. Most elderly and disabled
people have their Medicare Part B premiums deducted from their monthly Social Security checks. For these
individuals, if Social Security benefits don't rise, Medicare premiums can't either. This “hold harmless” provision
does not apply to about 30 percent of Medicare beneficiaries: those enrolled in Medicare but who are not yet
receiving Social Security, new Medicare beneficiaries, seniors earning more than $85,000 a year, and "dual
eligibles" who get both Medicare and Medicaid benefits. In the past few years, Medicare beneficiaries not subject to
the hold harmless provision have been paying higher Medicare premiums while Medicare premiums for those in the
hold harmless group remained more or less the same. Now that seniors will be getting an increase in Social Security
payments, Medicare will likely hike premiums for the seniors in the hold harmless group. And that increase may eat
up the entire raise , at least for some beneficiaries.
For 2018, the monthly federal Supplemental Security Income (SSI) payment standard will be $750 for an individual
and $1,125 for a couple.

For more on the 2018 Social Security benefit levels, click here.

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