Each year, Medicare administrators analyze the system’s coverage and budget, and issues changes to certain plan components. Usually this means incremental increases in premiums or deductibles. In most cases these changes are not significant, but it can be important for retirees to keep up with them so that you can adjust your own financial plans for the year.

Coming in January 2020, Medicare will issue changes to Part A and Part B deductibles, and to Part B premiums.

Deductibles increase in 2020. The deductible refers to the healthcare expenses that you will pay out of pocket, before your plan covers the rest for the year. In 2020, Part A deductibles will rise from $1364 to $1420.

Part B deductibles, on the other hand, will increase from $185 to $197 annually.

Between Part A and Part B deductibles, you should expect to spend an additional $68 dollars next year ($56 plus $12), assuming you seek enough healthcare through both plans to reach those limits. It’s not a huge difference, but you should plan your annual budget accordingly.

Part B premiums. Most people do not pay a premium for Part A, but Part B premiums can and do change periodically. For most Medicare beneficiaries, Part B premiums will rise from $135.50 to $144.30 per month next year – an increase of $8.80.

That’s not an enormous difference, and for most retirees the increase will be covered by the cost of living adjustment which is due to Social Security beneficiaries. In 2020, the 1.6 percent COLA will amount to about 23 dollars for the average Social Security check.

But because Part B premiums are deducted from Social Security checks, a lesser-known rule might prevent some beneficiaries from seeing the entire Part B premium increase. That rule states that Part B premium increases cannot outpace raises to Social Security benefits. So, if your own COLA falls below $8.80, your Part B premium increase will be limited to the amount of your COLA.

If any of this information is confusing, please give us a call so that we can clarify. We can help you figure out what to expect from Medicare changes in 2020, and help you plan ahead.