Medicare Part B Premiums Rise, While Advantage Plan Premiums Fall
Medicare Part B premiums will increase about 6.7% for most Medicare enrollees for the 2020 policy year, the Centers for Medicare and Medicaid Services announced in early November.
Part B, considered a part of the original Medicare formula, pays for doctor services and hospital outpatient care.
The increase means that the premium for most individual filers and those filing jointly will be $144.60 per month in 2020, compared to $135.50 this year. The rise is the largest in a few years, after growing just 1.1% in 2019 and nothing at all in 2018.
CMS faulted the skyrocketing cost of medications for the large premium increase. The 2020 increase "is largely due to rising spending on physician-administered drugs," officials said in the rate announcement. "These higher costs have a ripple effect and result in higher Part B premiums."
For Part A, which covers inpatient hospital, skilled nursing and some home health care services, most Medicare beneficiaries do not pay a premium because they have enough of a work history of paying into the system to qualify for it premium-free.
However, there are deductibles that go with Part A. The amount you'll pay when admitted to the hospital will be $1,408 next year, up $44 from $1,364 in 2019. That covers the first 60 days of Medicare-covered inpatient hospital care in a benefit period.
Part B premiums are set by income level.
Part B 2020 monthly premiums
For individual filers making $87,000 or less a year, and for joint filers making $174,000 or less a year: $144.60 (up from $135.50 in 2019).
Individual filers making between $87,000 and $109,000, and joint filers making between $174,000 and $218,000: $202.40 (up from $189.60).
Individual filers making between $109,000 and $136,000, and joint filers making between $218,000 and $272,000: $289.20 (up from $270.90).
Individual filers making between $136,000 and $163,000, and joint filers making between $272,000 and $326,000: $376.00 (up from $352.20).
Individual filers making between $163,000 and $500 000, and joint filers making between $326,000 and $750,000: $462.70 (up from $433.40).
Individual filers making more than $500,000, and joint filers making more than $750,000: $491.60 (up from $460.50).
Medicare Part B deductible for 2020: $198, up 7% from $185 in 2019.
The Medicare Part A hospitalization deductible will rise by 3.2%, to $1,408.
Medicare Advantage
Meanwhile, Medicare Advantage premiums for 2020 will drop by an average of 23% when compared with premiums in 2018, according to CMS estimates. This continues an overall trend of falling average premiums over the past three years.
Since 2017, the average monthly Medicare Advantage premium has fallen by 28%, and the 2020 estimates represent the lowest average monthly premium for a Medicare Advantage plan has been since 2007, CMS said.
In 2020, most Medicare Advantage plans include drug coverage, and many offer vision, dental and hearing exams. Beyond that, experts advise focusing on benefits most critical for your needs when comparing plans.
More than half of all plans will offer additional telehealth benefits in 2020, and many offer supplemental benefits tailored to specific needs such as adult care services or caregiver support services.
Another big change for next year is the drug savings. You will pay no more than 25% for covered brand-name and generic drugs from the time you meet the deductible until you reach the out-of-pocket spending limit in 2020 of $6,350. The 25% is down from the generics cap in 2019 of 37%.
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