What's New for Medicare in 2020

The Centers of Medicare and Medicaid (CMS) are responsible for managing the 75 million people who receive this healthcare coverage. In order to ensure there is enough money, changes are made to the plans every so often. And - you guessed it - premiums often rise as a result. 

Whether you’re a long-standing Medicare member, new to Medicare or approaching age 65, here’s what’s new for this healthcare coverage in 2020. 

Higher Part A Premiums and Deductibles 

Medicare Part A is the part of Medicare that pays for nursing home care, hospitalizations and healthcare services. Most people do not pay a deductible for Part A because they prepaid for it during their working years. But for those who do pay, premiums have gone up. Here’s what you need to know.

- People who worked for 30-39 quarters in their lifetime will pay $252/month, up $12/month since 2019.
- People who worked less than 30 quarters in their lifetime will pay $458/month, up $21/month since 2019. 
- Deductibles for each benefit period are $1,408, up $44 from 2019.  
- Part A charges participants a coinsurance of $352 per day (from days 61-90), up from $341 in 2019. After 90 days, you pay $704 per day, up from $682 in 2019. 
- Daily coinsurance for skilled nursing facilities (for days 21-100) are $176 a day, up from $170.50 in 2019. 

Higher Part B Premiums and Deductibles 

Medicare Part B covers outpatient services, physician fees, home health care services, medical equipment and some medications. Most people pay a premium for this plan based on their income. 

For individuals who make less than $87,000 per year and couples who make less than $174,000 per year, their monthly premium is $144.60, up $9.10 from last year. Deductibles also increased under Part B, going from $185 to $198. 

Removal of “Donut Hole” in Medicare Part D 

Part D is the prescription drug plan for Medicare. Your premium costs are adjusted based on your income. One big change in Part D is the closing of the “donut hole.” The donut hole is a gap in coverage that happens once the plan has paid out a certain amount of prescriptions for the year. 

Once this limit is reached, you pay 25% of the cost of your medications until you reach your out-of-pocket max. Before the donut hole closure, you had to pay 40% of your drug costs before you could reach your out-of-pocket maximum, leaving a donut hole. 

Change in Income Brackets 

The income brackets for Medicare are also getting an update. Income brackets were introduced in 2007 and influence what you pay for Medicare, among other things. The bottom bracket is set at $85,000 for individuals and $170,000 for couples. However, this has been increased to $87,000 and $174,000, respectively, due to inflation. 
Even though prices are increasing for Medicare, there are still ways to save money. Contact Leonard Financial Solutions in New Jersey to learn more about Medicare and the money it can save on essential healthcare services.