Medicare B costs projected to increase

Medicare’s trustees are projecting that the standard monthly premium in 2020 for Medicare Part B, which covers doctor visits and other types of outpatient care, will increase by $8.80 a month to $144.30. A final figure is expected in the fall.

The increase comes after the Part B premium for most people rose modestly in 2019 to $135.50, from $134 in 2018.

Even though Medicare Part A, which covers hospitalization, is free for most people 65 and older, Medicare Part B charges a monthly premium that currently ranges from $135.50 to $460.50, depending on a beneficiary’s income.

Many people also choose to buy private “supplement” policies, which pay for expenses Medicare doesn’t cover, and Part D prescription drug plans. Others choose to receive benefits through private Medicare Advantage plans, which generally charge premiums, co-payments and deductibles.

The projected increase for next year partly reflects that health care prices are increasing at levels that significantly exceed overall inflation, which has been the case for many years.

According to the projections by Medicare’s trustees, individuals with modified adjusted gross incomes of $85,000 to $107,000 — and couples between $170,000 and $214,000 — will pay $202.00 in 2020, up from $189.60 this year.

For those earning $107,000 to $133,500 — and couples with incomes between $214,000 and $267,000—the projected cost is $288.50, up from $270.90 in 2019. And for individuals with incomes between $133,500 and $160,000 — and couples between $267,000 and $320,000 — the projected premium for 2020 is $375.10, up from $352.20 now.

The cost increases will be greatest for those with higher incomes: Individuals with incomes from $160,000 to $500,000 — and couples between $320,000 and $750,000 — are projected to pay $461.60, up from $433.40 in 2019. And for Individuals with incomes of $500,000 or more — and couples with $750,000 or more — the Part B premium is projected to rise to $490.50, up from $460.50 in 2019.

People in the top income tier are required to pay 85% of the cost of their Medicare Parts B and D benefits. In contrast, Medicare beneficiaries with incomes of $85,000 or less — or $170,000 or less for couples — pay 25% of the cost of their benefits.

Because the income thresholds at which higher premiums surcharges kick in haven’t been adjusted for inflation since 2011, more people are falling into the higher income brackets, according to the Kaiser Family Foundation.

In 2018, 3.7 million Medicare recipients, or 6.8% of the 54.6 million total, paid more than the standard premium amount for Part B. That is up from 6.6% in 2017.

Starting in 2020, the income thresholds are scheduled to be adjusted for inflation.