Older Americans must prepare for the biggest increase in Part B
premiums in three years.
Dan
Caplinger (TMFGalagan) Nov 18, 2019 at 12:00PM
Medicare provides essential coverage for
healthcare costs for most Americans 65 or older, and the demographic shift that
has resulted in a flood of new retirees over the past decade has made the
Medicare program larger than ever. Unfortunately, having more people in the
program means higher costs, and Medicare relies on a variety of funding sources
to ensure that the government will have enough money to cover those costs.
A big part of the way that the Medicare program
gets money to cover outpatient healthcare costs like doctor visits is through
the premiums that most plan participants have to pay every month. The Centers
for Medicare & Medicaid Services announces the base monthly premium amount
each year, and the number for 2020 is slated to be $144.60 per month. That's
$9.10 higher than it was in 2019, and while that might not sound like a huge
increase, it's the biggest that the program has seen since 2017's
$12.20-per-month hike.
DATA
SOURCE: CENTERS FOR MEDICARE & MEDICAID SERVICES. CHART BY AUTHOR.
Most retirees have their Medicare Part B
premiums taken directly out of their Social Security checks, so they might not
even notice the boost. However, with the cost-of-living adjustment for Social
Security in 2020 amounting to just 1.6% -- or about $23 per month for the typical retiree --
losing $9.10 of that increase to higher Medicare premiums will make their net
Social Security checks go up by even less.
Costs for the Medicare program have typically
gone up in spurts in the past, and the big increase for 2020 seems to be the
latest in the cycle of upticks for the measure. Retirees have to hope that
future increases will be more moderate. But if the past is any guide, this
could be just the beginning of a series of similar premium hikes that could
come in 2021 and beyond.
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