Medicare Premium Differences in 2020
Medicare premiums are on the rise. For seniors living on a retirement income, it’s important to know where the increase in cost is coming from. More importantly, it’s essential to learn how you can keep your monthly premiums as low as possible without sacrificing quality healthcare coverage. We will provide a cost breakdown for 2020 and will help you determine how you can save while still ensuring maximum coverage.
Medicare Deductibles in 2020
Original Medicare comes in four parts – Part A, B, C, and D.
- Part A: Covers hospital stays and expenses. Part A is automatically applied to anyone with Medicare.
- Part B: Covers doctor expenses. Part B is optional but highly recommended.
- Part C: Covers hospital, doctor, and often prescription drugs. Part C is optional, known as Medicare Advantage, and may help reduce overall healthcare costs.
- Part D: Covers prescription drugs. Part D is optional but highly recommended.
Part A is usually free unless the person applying has worked less than 30 quarters and did not contribute to social security payments. Part B, C, and D all have deductibles.
All premiums are adjusted based on income and change yearly. For 2020, all premiums will increase regardless of your income bracket.
Medicare Cost Adjustments
Here is a brief look at changes from 2019 to 2020 Medicare costs.
| Part | 2019 Cost | 2020 Cost |
| Part A Premium | Usually free* | Usually free* |
| Part A Deductible | $1,364 deductible per benefit period | $1,408 deductible per benefit period |
| Part A Coinsurance per benefit period | Days 1-60: $0 per day | Days 1-60: $0 per day |
| Days 61-90: $341 per day | Days 61-90: $352 per day | |
| Days 91+: $682 per “lifetime reserve” day up to 60 days | Days 91+: $704 per “lifetime reserve” day up to 60 days | |
| After lifetime reserve: All costs | After lifetime reserve: All costs | |
| Part B Premium | $135.50+ | $144.60+ |
| Part B Deductible | $185 | $198 |
| Part B Coinsurance per benefit period | 20% after deductible is met | 20% after deductible is met |
| Part C Premium | Varies by plan | Varies by plan |
| Part D Premium | Varies by plan | Varies by plan |
*To qualify for free Part A Medicare coverage, an individual must have worked and contributed payment toward social security benefits for a minimum of 30 quarters or 7.5 years.
Medicare Part B Premiums 2020
Knowing how much you’ll be expected to pay for healthcare premiums is important when living on a fixed income. To determine the cost of your Part B premium you’ll need to check your 2018 tax information, as your income from two years prior determines 2020 premium costs.
| If your yearly income for 2018 was: | Your 2020 premium will be: | ||
| Individual filing | Married filing jointly | Married filing separately | |
| $87,000 or less | $174,000 or less | $87,000 or less | $144.60 |
| $87,001 to $109,000 | $174,001 to $218,000 | N/A | $202.40 |
| $109,001 to $136,000 | $218,001 to $272,000 | N/A | $289.20 |
| $136,001 to $163,000 | $272,001 to $326,000 | N/A | $376.00 |
| $163,001 to $499,999 | $326,001 to $649,999 | $87,001 to $412,999 | $426.70 |
| $500,000 + | $750,000 + | $413,000 + | $491.60 |
Part D Premium 2020
The same rules apply for your Part D coverage. Premium costs are associated with your 2018 tax return and vary by plan. The change for 2020 is that, depending on your income level, you will cover the cost of your Part D premium in addition to a surcharge. A higher income results in a greater surcharge.
Here is a general estimate:
| If your yearly income for 2018 was: | Your 2020 Premium will be: | ||
| Individual filing | Married filing jointly | Married filing separately | |
| $87,000 or less | $174,000 or less | $87,000 or less | Plan premium only |
| $87,001 to $109,000 | $174,001 to $218,000 | N/A | Plan premium + $12.20 |
| $109,001 to $136,000 | $218,001 to $272,000 | N/A | Plan premium + $31.50 |
| $136,001 to $163,000 | $272,001 to $326,000 | N/A | Plan premium + $50.70 |
| $163,001 to $499,999 | $326,001 to $649,999 | $87,001 to $412,999 | Plan premium + $70.00 |
| $500,000 + | $750,000 + | $413,000 + | Plan premium + $76.40 |
Income Changes
If changes in your income have occurred, call the Social Security office and submit proper documentation so you won’t have to pay more than necessary.
Applicable changes include:
- Marriage, divorce, or widowhood.
- One or both parties stop working or reduce working hours.
- Loss of income-producing property due to natural disaster or another uncontrolled event.forwp-incontent-custom-banner ampforwp-incontent-ad3">
- One or both parties experience ceasing, termination, or reorganization of an employer’s pension plan.
- One or both parties receive a settlement from an employer or former employer due to an employer’s business closing, bankruptcy, or reorganization.
Ways To Save On Medicare Costs
If you’re one of the 7.5 million seniors struggling to afford healthcare necessities like prescription drug coverage, there are savvy ways to save.
Medicare Advantage or Part C
Original Medicare Parts A and B only cover hospital and doctor fees, as seen in the first chart in this article. Unfortunately, this means necessities such as vision, dental, and hearing coverage are not included. If you want a prescription drug plan, you’ll need to purchase a separate plan, either Part D or a Medicare Advantage plan.
With a Medicare Advantage plan, you apply for Part A and B coverage, pay for it together and often receive extras such as vision, dental, and drug coverage. Here’s a snapshot of plan differences between Original Medicare and Medicare Advantage in 2020.
| ORIGINAL MEDICARE | MEDICARE ADVANTAGE | |
| Coverage | Part A and B | Part A, B, D + vision, dental, and hearing* |
| Maximum Out-of-Pocket Costs | No Maximum on OOP costs | Yearly limit on OOP costs. After OOP limit, members pay nothing. |
| Doctors and Hospitals | Any doctor or hospital that accepts Medicare | Doctors and hospitals in your plan’s network. Out-of-network doctors and hospitals may incur higher costs. |
| Premiums | Part A – No premium
Part B – Around $144.60+/mo. |
Part B – Around $144.60+/mo. + plans start as low as $0/mo. |
| Deductibles | Part A – Around $1,408
Part B – Around $198 |
Deductibles and copays vary |
| Prescription Drug Coverage | Must purchase Part D or standalone drug coverage | Varies by plan |
*Not all Medicare Advantage plans cover vision, dental, and hearing.
The biggest savings when choosing a Medicare Advantage plan is the included extras such as vision, dental, hearing, and drug coverage. Often, your Medicare Advantage premium will cost less than if you purchased Part A, B, D, and a hearing or vision plan individually.
Choose Medicare Plans 2020
Choosing the right Medicare plan for your health care is an important step to ensure a healthy and fulfilling future. Making a choice doesn’t have to be overwhelming or complicated. Talk with a Medicare advisor to determine which plan and cost are right for you.