What is the Medicare Hold Harmless Provision?
Key Takeaways
- The Medicare Hold Harmless Provision prevents Social Security checks from decreasing if Medicare Part B premiums rise, ensuring premium increases don’t exceed the Social Security cost-of-living adjustment (COLA).
- Eligibility is limited to beneficiaries who have premiums deducted from Social Security; it excludes new enrollees, those not receiving Social Security, Medicaid-paid premiums, and high-income beneficiaries paying IRMAA.
- COLA adjustments increase Social Security benefits annually based on inflation, and the provision ensures Part B premium increases stay within that COLA rise.
- Other ways to save on Medicare include Medicare Savings Programs, Medicaid dual eligibility plans, and Medicare Extra Help for Part D costs.
The Medicare Hold Harmless Provision, also known as the Medicare Hold Harmless Agreement, is a rule that protects Medicare beneficiaries from having their Social Security benefits reduced due to rising costs in Medicare Part B premiums. Any increase in Part B premiums cannot be greater than the increase in a beneficiary’s Social Security cost-of-living adjustment. Learn more about how this provision protects beneficiaries.
Why the Medicare Hold Harmless Provision Is Needed
The Medicare Hold Harmless Provision ensures retirees that their Social Security check won’t decrease even if the Part B premium increases. It was designed to protect low-income retirees and ensure that rising healthcare costs don’t consume their Social Security benefits.
To provide a glimpse into why rising Medicare costs can be an issue, consider that when Medicare was first launched in 1966, the Part B premium was $3 per month. It has risen every year since then and now in 2025, the Part B premium is $185 per month.
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How the Medicare Hold Harmless Provision Works
Original Medicare Part B, which covers outpatient medical services, preventive care, and some medical equipment, requires beneficiaries to pay a monthly premium. In 2025, the monthly premium for Part B is $185.00. Beneficiaries with higher incomes may pay more than the standard premium.
Each year, the Medicare Part B premium increases. The Medicare Hold Harmless Provision ensures that any increase in Medicare Part B premiums cannot be greater than the increase in a beneficiary’s Social Security cost-of-living adjustment (COLA).
Eligibility
Not every Medicare beneficiary is eligible for the Medicare Hold Harmless Provision. Only beneficiaries who have their Medicare Part B premiums deducted directly from their Social Security checks are eligible. Beneficiaries who are not covered include:
- New Medicare enrollees for the year
- Medicare enrollees who do not receive Social Security benefits
- Medicare beneficiaries whose premiums are paid by Medicaid programs
- Medicare beneficiaries who are subject to Income-Related Monthly Adjustment Amounts (IRMAA). These beneficiaries are those with higher incomes.
What Is the Cost of Living Adjustment (COLA)?
A Cost-of-Living Adjustment (COLA) is an increase in benefits to offset inflation. Cost-of-living adjustments are typically aligned with the Consumer Price Index (CPI), reflecting changes in inflation. Social Security benefits increase each year as the cost of goods and services rises with inflation.
See It In Action
Let’s see how the Medicare Hold Harmless Provision works using an example. Sally is a Medicare beneficiary that has her Part B premium deducted from her Social Security check each month. In 2024, the cost-of-living adjustment (COLA) was 3%. This means that her monthly social security check will increase by 3%.
If Sally received $600 monthly from Social Security in 2023, then in 2024 she will receive $618 per month. The Medicare Hold Harmless Provision ensures that the Part B premium will not increase more than the 3% COLA.
Please note these figures are for demonstration purposes only and your personal benefits may differ.
Other Ways to Save On Medicare
Even with the COLA, Medicare premiums can still be expensive. If you need assistance with out-of-pocket expenses, there are several ways to save on Medicare.
- Medicare Savings Programs: These are state-run programs that help cover premiums, deductibles, and coinsurance. Eligibility for a Medicare Savings Program is based on income and financial resources.
- Medicaid Dual Eligibility: For beneficiaries who have both Medicaid and Medicare, enrolling in a Medicare Advantage Dual-Eligible Special Needs Program can streamline benefits coordination.
- Medicare Extra Help: For beneficiaries with limited income and resources, Medicare Extra Help pays for some of the Medicare Part D costs. The Part D premium and deductible is covered. Some people qualify automatically for Extra Help, while others need to apply.
Putting It All Together
The Medicare Hold Harmless Provision protects beneficiaries by ensuring that Part B premium increases cannot exceed their Social Security cost-of-living adjustment (COLA), preventing reductions in monthly Social Security payments. This provision mainly helps low-income retirees whose premiums are deducted directly from their Social Security benefits. However, it does not apply to new enrollees, high-income beneficiaries paying IRMAA, or those whose premiums are paid by Medicaid.
Sources
- Thirty Years of Medicare: Impact on the Covered Population. SSA.gov
- What does Medicare cost? Medicare.gov