Warn your clients: Medicare costs will be increasing in 2020. CMS has released an announcement on Medicare Part A and Medicare Part B premiums, deductibles and coinsurance amounts for 2020. The amounts are increasing.
The Reason Behind the Increase
Every year, Medicare premiums, deductibles and copayments are adjusted. This means that costs have the potential to increase each year. According to CMS, the increase in Medicare Part B premiums and deductibles is largely due to increasing costs associated with physician-administered drugs, which have a ripple effect on Part B costs in general.
2020 Part B Costs
The standard Medicare Part B monthly premium will go from $135.50 in 2019 to $144.60 in 2020, an increase of $9.10 per month.
However, some people will pay even more. The Medicare Part B premium is based on income, so people who are earning more will also end up paying more. CMS says that amount 7 percent of enrollees will be impacted by the income-related monthly adjustment amounts.
These are the Part B monthly premium amounts for 2020, both for single taxpayers and for married taxpayers filing jointly:
- Single earning $87,000 or less/Married earning $174,000 or less: $144.66
- Single earning $87,000 to $109,000/Married earning $174,000 to $218,000: $202.40
- Single earning $109,000 to 136,000/Married earning $218,000 to $272,000: $289.20
- Single earning $136,000 to $163,000/Married earning $272,000 to $326,000: $376.00
- Single earning $163,000 to $500,000/Married earning $326,000 to $750,000: $462.70
- Single earning $500,000 and up/Married earning $750,000 and up: $491.60
The Medicare Part B deductible is also increasing. The annual deductible for Medicare Part B was $185 for 2019. For 2020, it will be $198, an increase of $13.
2020 Part A Deductible and Coinsurance Amounts
Although many beneficiaries receive premium-free Medicare Part A, they will still be paying more in 2020 due to higher deductible and coinsurance amounts.
- The inpatient hospital deductible is increasing from $1,364 in 2019 to $1,408 in 2020.
- The daily coinsurance for the 61st to 90th day of hospitalization is increasing from $341 in 2019 to $352 in 2020.
- The daily coinsurance for lifetime reserve days in increasing from $682 in 2019 to $704 in 2020.
- The skilled nursing facility coinsurance is increasing from $170.50 in 2019 to $176 in 2020.
Although these cost increases are bad news for anyone trying to stick to a fixed income and a limited budget, there is good news. Average Medicare Advantage premiums are decreasing for 2020. According to CMS, average Medicare Advantage premiums have gone down by 23 percent since 2018.
WAP has created this handy PDF reference sheet for agent use only. It is also available on your WAP dashboard under Marketing and Compliance resources.
