Medicare – Murrieta Retirees Beware – More bad news for seniors on Original Medicare. As if the government wasn’t already squeezing medicare recipients already, now the squeeze is getting tighter.
Medicare | Every day, 10,000 or so baby boomers are turning 65. Some of you have probably already retired. Many are likely counting the days until they can leave the full-time workforce. For many of you, Social Security will be a major part of your retirement income.
With that in mind, it is important to know how Social Security will be changing for 2020. Roughly 70 percent of Social Security recipients have their Medicare Part B premiums automatically deducted from their Social Security check every month, and according to Medicare those deductions are going to increase in 2019.
Medicare Part B premiums will increase to $135.50 in 2019 from $134 in 2018, but the increase could be bigger for Americans who have been protected from past premium increases by Social Security’s hold harmless provision, a rule that prevents premiums from increasing by more than recipients’ Social Security checks.
Original premiums and deductibles for 2020 will take a bigger bite out of Social Security payments.
Health care already accounts for more than 10% of spending by senior households, on average. And 2020 brings more bad news for the pocketbooks of seniors on Original Medicare.
Several premiums and deductibles for folks on the traditional, government-managed type of Medicare will increase in the new year, the federal government recently announced.
What’s more, these increases for 2020 will be significantly greater than they were for 2019:
- 2020 Part B standard monthly premium: $144.60 per month, which is an increase of $9.10 per month from 2019. That’s compared with an increase of only $1.50 per month one year prior.
- 2020 Part B annual deductible: $198 per year, an increase of $13. That’s compared with an increase of $2 one year prior.
- 2020 Part A annual inpatient hospital deductible: $1,408 per benefit period, an increase of $44. That’s compared with an increase of $24 one year prior.
More bad news: The higher cost increases for 2020 will effectively negate much of the 1.6% cost-of-living adjustment (COLA) that will increase retirees’ monthly Social Security benefit payments in the new year. For the average retiree, the 2020 COLA translates to only an extra $24 a month.
What Parts A and B cover
Medicare Part A covers the following types of care:
- Inpatient hospital services
- Skilled nursing facility services
- Some home health care services
About 99% of Medicare beneficiaries don’t have to a pay a premium for their Part A coverage thanks to how long they worked. That is, they get this break because they had Medicare taxes withheld from their paychecks during their working years.
Medicare Part B covers the following types of care:
- Physician services
- Outpatient hospital services
- Certain home health services
- Durable medical equipment
- Certain other medical and health services not covered by Medicare Part A
Note that Part B premiums are based on income. The standard monthly premium above applies to individuals who earn up to $87,000 and married couples who earn up to $174,000 and file a joint federal tax return.
Folks with higher incomes pay higher Part B premiums — which will be anywhere from $202.40 to $491.60 next year, depending on income.
Medicare Advantage premiums projected to fall
Original Medicare and Medicare Advantage are the two main types of Medicare.
Original Medicare is the traditional, fee-for-service Medicare program offered directly by the federal government. The costs of Original Medicare generally include the premiums and deductibles above.
Advantage plans are an alternative to the traditional program offered by private insurance companies. So, the costs of these plans, including any premiums and deductibles, vary by plan and insurer.
On average, though, Medicare Advantage premiums for 2020 are expected to be 23% lower than they were for 2018, according to the Centers for Medicare & Medicaid Services (CMS), the federal agency that oversees the Medicare program.
In fact, the average 2020 Medicare Advantage premium will be the lowest in the past 13 years, which CMS attributes to the agency’s efforts to drive competition.
The number of Medicare Advantage plans available for 2020 is greater than ever, according to a recent analysis by the nonprofit Kaiser Family Foundation.
Retire on your own terms with help from this course
The Only Retirement Guide You’ll Ever Need gives you the knowledge you need to retire on your own terms. Sure, you can pay a financial adviser, but this online course gives you total control to create a customized retirement plan around the things that matter to you — without the fees you can expect from financial firms and advisers.
You’ll get expert, personalized advice. You’ll have access to the latest tools. You’ll have ongoing support. And when you’ve completed the course, you’ll be ready to approach your retirement with confidence and with peace of mind.
It’s time to plan the best years of your life. Let’s get started.
More Social Security Taxes Coming in 2020
Whatever your age, take a moment and register for access to your Social Security Benefit estimates. Visit ssa.gov, just take a few minutes and you will be able to find more information about Social Security, and more importantly, what it will mean for your retirement.
Think about your Social Security benefits when you vote in 2020 as well. With record deficits and the skyrocketing national debt, there are rumblings of draconian cuts from Trump and the Republicans to programs like Social Security and Medicare.
Dee (Deidre) writes and Curates for several Financial Services Site Blogs. We’re glad to have her.