2020 Medicare Costs and Premiums
Medicare costs tend to fluctuate each year, and 2020 will be no exception.
While the 2020 costs of Medicare Part A and Part B premiums, deductibles and other expenses won’t be released until fall 2019, there’s still some helpful information we already know about Medicare costs in 2020.
Here is a list of 2020 Medicare cost and premium information that can help you as you budget for your 2020 health care spending.
The 2020 Medicare Part B Premium Is Expected to Rise
The standard Part B premium is $135.50 per month in 2019.
The 2019 Social Security and Medicare Trustees’ Report projects the standard premium for Medicare Part B will increase to $144.30 per month in 2020.1
If the 2020 projection is accurate, it would represent an increase of 6.5 percent. This is close to the average increase of 7.7 percent per year that the Part B premium has experienced since 1966 (although the Part B premium does not necessarily go up every year).3
The 2020 Medicare Part B Deductible Will Likely Increase
The Medicare Trustees’ Report also projected the Medicare Part B deductible will rise to $197 for the year in 2020, up from $185 in 2019.1
Since 2005, there have only been four instances in which the Medicare Part B deductible did not change from one year to the next (and only one year in which it went down from the previous year).
The 2020 Medicare Part A Deductible Is Likely to Increase
In 2019, the deductible is $1,364 per benefit period.
The Medicare Part A deductible has risen every year since 2006. If history is any indication, it will likely go up again in 2020.
2020 Medicare Part B And Part D IRMAAs May Decrease for Some Higher Income Earners
Medicare beneficiaries who report higher incomes may pay more for their Medicare Part B and Part D coverage because of an extra charge known as the Income-Related Monthly Adjusted Amount, or IRMAA.
For the first time since 2010, the income thresholds for Medicare IRMAAs will be indexed according to inflation.
That means the income level that determines whether or not someone is subject to this higher 2020 Part B or Part D premium will increase slightly. As a result, fewer people might be subject to IRMAA, and those who do pay the higher premiums will be delayed in how quickly they move up to higher income level brackets.
The chart below illustrates the income tax brackets that are affected by 2019 Medicare IRMAA.
|2017 Individual tax return||2017 Joint tax return||2017 Married and separate tax return||2019 Part B premium|
|$85,000 or less||$170,000 or less||$85,000 or less||$135.50|
|More than $85,000 and up to $107,000||More than $170,000 and up to $214,000||N/A||$189.60|
|More than $107,000 up to $133,500||More than $214,000 up to $267,000||N/A||$270.90|
|More than $133,500 up to $160,000||More than $267,000 up to $320,000||N/A||$352.20|
|More than $160,000 up to $500,000||More than $320,000 up to $750,000||More than $85,000 up to $415,000||$433.40|
|More $500,000||More than $750,000||More than $415,000||$460.50|
New Medicare Beneficiaries Who Become Eligible in 2020 Will Have to Pay the Part B Deductible
In 2019, Medicare beneficiaries had the opportunity to avoid paying the Part B deductible by signing up for a Medicare Supplement Insurance (Medigap) plan that covered this expense.
Beginning in 2020, only beneficiaries who became eligible for Medicare before January 1, 2020, will be allowed to have a Medigap plan that covers the Part B deductible.
Anyone who becomes eligible for Medicare on or after January 1, 2020, will not be able to apply for Medigap Plan F or Plan C.
If you already have Medigap Plan F or Plan C before 2020, you will be able to keep your plan. If you become eligible for Medicare before Jan. 1, 2020, you may be able to apply for Plan F or Plan C if either plan is available where you live.
You can use the chart below to compare the other Medigap plans that are available in 2019.
2020 Medicare Advantage Plan Premiums Costs Are Expected to Drop
Amid all of the cost increases discussed above, there does remain some good news for Medicare beneficiaries heading into 2020.
In 2019, the average premium for a Medicare Advantage plan (Medicare Part C) decreased for the fourth consecutive year. The average Part C premium is expected to decrease again in 2020.
Early projections from the Centers for Medicare and Medicaid Services (CMS) indicate the average plan premium will fall to $23 per month in 2020, down from $26.87 per month in 2019.2
Medicare Advantage plans are sold by private insurance companies and provide all of the same benefits as Medicare Part A and Part B.
Some Medicare Advantage plans may include extra coverage for things like dental and vision care, allowances for hearing aids and glasses, fitness club memberships and more.
In 2019, 90% of Medicare Advantage plans include prescription drug coverage.3
2020 Medicare Part D Premiums Are Expected to Drop Again
Medicare Part D prescription drug plan costs are also expected to drop in 2020.
The CMS projects the average monthly premium for a Part D plan to be around $30 per month, which is down from the 2019 average of $39.63 per month.4
Medicare Part D provides coverage for prescription drugs and may be used alongside Medicare Part A and Part B, as well as a Medicare Supplement Insurance (Medigap) plan.
Medicare Supplement Plans Can Help Cover Your 2020 Medicare Costs
Medigap plans help pay for some of the out-of-pocket costs that Original Medicare doesn’t cover, such as deductibles, coinsurance, copayments and more.
Depending on which Medigap plan you have, your plan may fully cover some of your 2020 Medicare costs such as your Part A and Part B coinsurance costs, your Part A deductible and some other Medicare costs.
To learn more about Medicare Supplement plans and to compare plans that are available in your area, call today to speak with a licensed insurance agent.
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1 Davis, P. Medicare: Part B Premiums. (Apr. 4, 2019). EveryCRSReport.com. Retrieved from www.everycrsreport.com/reports/R40082.html.
2 Centers for Medicare and Medicaid Services. Trump Administration Drives Down Medicare Advantage and Part D Premiums for Seniors. (Sept. 24, 2019). Retrieved from www.cms.gov/newsroom/press-releases/trump-administration-drives-down-medicare-advantage-and-part-d-premiums-seniorsl.
3 Jacobson, G., et al. A Dozen Facts About Medicare Advantage in 2019. (June 6, 2019). Kaiser Family Foundation. Retrieved from www.kff.org/medicare/issue-brief/a-dozen-facts-about-medicare-advantage-in-2019.
4 Trump Administration Drives Down Drug Costs for Seniors. Centers for Medicare and Medicaid Services (July 30, 2019). Retrieved from https://www.cms.gov/newsroom/press-releases/trump-administration-drives-down-drug-costs-seniors.
Christian Worstell is a health care and policy writer for MedicareSupplement.com. He has written hundreds of articles helping people better understand their Medicare coverage options.