A Medicare card superimposed over a dollar puzzle (Credit: Thinkstock)

The Centers for Medicare and Medicaid Services (CMS) announced today that it will increase Medicare Part B premiums about 6.7% for most enrollees in 2020.

The Medicare Part B program is the part of “Original Medicare” that pays for physician services and hospital outpatient care.

The 2020 increase is up from an increase of just 1.1% in 2019, and up from no increase in 2018.

(Related: Medicare Posts 2019 Rates, Pinches High Earners)

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.”

Here’s a look at how the monthly Part B premiums will change, by annual income level:

Individual Filers Joint Filers Total 2020 Monthly Premium Amount Total 2019 Monthly Premium Amount
with income: with income:
Less than or equal to $87,000 Less than or equal to $174,000 $144.60 $135.50
Greater than $87,000 and less than or equal to $109,000 Greater than $174,000 and less than or equal to $218,000 $202.40 $189.60
Greater than $109,000 and less than or equal to $136,000 Greater than $218,000 and less than or equal to $272,000 $289.20 $270.90
Greater than $136,000 and less than or equal to $163,000 Greater than $272,000 and less than or equal to $326,000 $376.00 $352.20
Greater than $163,000 and less than $500 000 Greater than $326,000 and less than $750,000 $462.70 $433.40
Greater than or equal to $500,000 Greater than or equal to $750,000 $491.60 $460.50

The annual Medicare Part B deductible will increase 7%, to $198. In 2019, the Medicare Part B deductible increased by just 1.1%.

Most people pay for Medicare Part A coverage, or Medicare hospitalization coverage, by paying payroll taxes over the course of their lives.

For people who do have to pay for Part A coverage themselves, the maximum possible monthly premium will increase 4.8%, to $458.

The Medicare Part A hospitalization deductible will rise 3.2%, to $1,408.

Medicare v. the Social Security Cost-of-Living Adjustment (COLA)

The Social Security Administration recently announced that the 2020 Social Security COLA will be 1.6%.

That means the size of the 2020 COLA will be much smaller than the 2020 increase in Medicare Part B premiums.

Resources

Officials at the Centers for Medicare and Medicaid Services, the agency that runs Medicare, are preparing to publish the official 2020 Medicare rate notices in the Federal Register Nov. 13. A preview copy of the Part A notice is available here, and a preview copy of the Part B notice is available here.

— Read Medicare Posts $1.6 Billion Losson ThinkAdvisor.

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