Medicare Part B premiums will be higher in 2020 than in 2019, while deductibles in Part A, which typically doesn’t have a premium, will also rise, according to CMS.
CMS also recently announced premiums for Medicare Advantage and Medicare Part D will drop in 2020. In addition, Obamacare premiums for baseline plans are expected to drop 4% in 2020.
Part B, which covers physician services, outpatient hospital services, some home health services, durable medical equipment and other services not covered in Part A, will have a standard monthly premium of $144.60 for 2020, a little more than a $9 increase from the $135.50 in 2019. Meanwhile, the Part B deductible for all Medicare beneficiaries will be $198 in 2020, up $13 from $185 in 2019.
A Medicare beneficiary’s Part B monthly premium is income-based, and about 7% of people with Part B will see income-related monthly adjustment amounts in 2020.
According to CMS, the increase is mostly due to higher drug prices for physician-administered drugs. The agency is currently required to reimburse Part B payments for the average sale price of a drug plus a physician’s percentage of a drug’s sale price.
“These higher costs have a ripple effect and result in higher Part B premiums and deductible,” the announcement from CMS reads.
Part A, which covers inpatient hospital, skilled nursing facility and other home health care services, will also have higher prices in 2020. Deductibles for inpatient hospital visits will rise to $1,408 in 2020, up $44 from $1,364 in 2019. Coinsurance amount per day of hospitalizations as well as for lifetime reserve days and coinsurance for skilled nursing facilities will also rise in 2020.
Fortunately, the vast majority of Medicare beneficiaries don’t have Part A premiums because they have at least 40 quarters of Medicare-covered employment. Those who have to buy into Medicare Part A will see a slight increase in premiums, up $12 from 2019 to $252 in 2020. Others who have less than 30 months of Medicare-covered employment will have to pay the full premium, of $458 per month in 2020, up $21 from 2019.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."