Congress Caps 2021 Medicare Part B Premium

October 15, 2020: As just announced by the Social Security Administration (SSA) this week, the benefits, payable to more than 64 million Social Security beneficiaries, will be increased by a 1.3% cost-of-living adjustment (COLA). This COLA increase will begin on December 31, 2020.

For members also receiving Medicare, Social Security will not be able to compute their new benefit amount until after the Medicare premium amounts for 2021 are announced. It must be noted that the Part B premium is a separate calculation by the federal CMS (Centers for Medicare & Medicaid Services) and is expected to be announced by mid-November.

Therefore, final Social Security 2021 benefit amounts (including the new Part B premium) will be communicated to beneficiaries in December through the mail. Most will be able to view their COLA notice online through their personal my Social Security account. Members may create a my Social Security account online at

It is noteworthy that the Social Security COLA announcement essentially triggers the decision-making process for the 2021 COLAs of retired state, teacher and local retirees. That said, it is also important to emphasize that the adoption of state, teacher and local COLAs is not governed, in any way, by the decisions made by SSA or CMS. Pension COLAs are governed by state law under M.G.L. Chapter 32.

25% Cap On 2021 Medicare Part B Premium 

While there is a great deal of uncertainty surrounding the 2021 Part B premium, the Medicare trustees have forecasted that the standard premium would rise from $144.60 this year to $153.30 next year ($8.70 more monthly, or a 6% increase). However, the trustees’ forecast noted that the impacts of COVD-19 were unknown and therefore could not be factored into the estimates.

It also must be emphasized that the trustees’ forecast is the “standard” increase.  Certain groups of retirees (for example, higher income retirees) could experience far greater premium increases each month – potentially up to $50. There are six tiers of Medicare Part B premiums, based on a retiree’s income. Tiering of Medicare Part B premiums began in 2007, following the passage of Medicare reform by the then Republican Controlled Congress and signed into law by President George W. Bush. 

Many members will be “Held Harmless” from the 2021 premium increase. That means that while they won’t see their Social Security benefits go down, they won’t see any increase either. That’s because all of their new COLA will go toward paying for the 2021 increase in Part B. 

To head off this highly undesirable consequence due to a potential Part B premium spike, Congress made a move at the end of last month. As part of a short-term government funding bill passed by the Congress and signed by President, any increase in Medicare Part B premiums for 2021 would be capped at 25% of what it otherwise would be for 2021.

We reached out to our good friend, Congressman Richie Neal of Springfield, who chairs the House Ways & Means Committee. Here’s what Chairman Neal had to say on this.

“Due to a low COLA as well as the Trump Administration’s unauthorized use of Medicare funds for provider loans, Medicare beneficiaries could have experienced a substantial $50 monthly increase to their Part B premium without congressional intervention. I worked with Speaker Pelosi and Energy and Commerce Committee Chairman Pallone to ensure the continuing resolution included a provision that protects beneficiaries from the expected premium hike. On top of all the other hardships they’re experiencing during the ongoing COVID economic and public health crises, Americans should not also face increased Medicare costs.”

As news on this issue breaks, we will be updating you here, facebook, eblasts and our toll-free hotline. So please stay tuned.