- While Medicare Part A is usually covered, you'll need to pay for Medicare Part B.
- Medicare Part B covers important medical visits.
- Your Medicare Part B premium cost will depend on your income level.
For many Americans, Medicare premiums are an unavoidable retirement expense. Depending on the coverage you choose, Medicare covers everything from medical appointments to prescription medications. As with any other type of insurance, though, your premiums are likely to increase from one year to the next.
Many retirees find that Medicare Parts A and B are the most essential types of coverage to have. Part A covers hospitalization, while Part B takes care of those all-too-important medical visits. Usually, Part A will be covered, as long as you paid taxes over the years. But you’ll need to pay for Part B, and those premiums aren’t cheap. Even worse, they tend to rise over time. If you’re wondering, “How much does Medicare cost?”, we’re going to break down just how much Medicare Part B premiums will cost in 2020.
How much does Medicare Part B cost in 2020?
For 2020, the cost of Medicare Part B is based on your annual income as reported on your 2018 tax return. The Social Security Administration (SSA) uses income-related monthly adjustment amounts (IRMAA) to apply higher rates to those falling within predetermined income brackets. Those who pay IRMAA receive a notification from the SSA letting them know their income qualifies them for a higher amount.
|Individual reported annual income:||Filing jointly reported annual income:||2020 amount||2019 amount||Increase amount|
|Less than $87,000||Less than $174,000||$144.60||$135.50||$9.10|
|$87,000 - $109,000||$174,000 - $218,000||$202.40||189.60||$12.80|
|$109,000 - $136,000||$218,000 - $272,000||$289.20||$270.90||$18.30|
|$136,000 - $163,000||$272,000 - $326,000||$376.00||$352.20||$23.80|
|$163,000 - $500,000||$326,000 - $750,000||$462.70||$433.40||$29.30|
|More than $500,000||More than $750,000||$491.60||$460.50||$31.10|
Your annual deductible will also see a small increase in 2020. In 2019, you had to spend $185 to reach the yearly deductible amount. The Medicare Part B deductible rose to $198 in 2020 – a $13 increase. If you’ve retired or had another income-changing event since 2018, you can complete this form to have your Medicare Part B premiums reduced.
Increase of Medicare Part B since 2019
As medical care costs rise from year to year, premiums are adjusted to cover those increases. According to the Center for Medicare Services, the small increases are linked to the higher costs of physician-administered medications. Most people will pay the $144.60 premium, which is deducted from your Social Security payment if you receive one, or billed to you if you don’t.
It’s also notable that the Medicare Part B deductible is increasing by $13 in 2020. That means you’ll need to pay $198 annually before your Medicare coverage kicks in. At that point, 80 percent of the cost of your care will be covered, which means you’ll be responsible for the other 20 percent. But preventive care is fully covered, with no deductible applied, so yearly physicals, bone density tests, certain screenings, vaccinations, and some therapies are available at no charge to you.
Although the Medicare Part B premium 2020 rates are slightly higher than the 2019 rates, it’s a relatively small increase. A private Medicare Supplement Plan could even help offset some of the costs Medicare doesn’t cover, such as dental care, eye exams, and hearing aids, along with the 20 percent out-of-pocket you have to pay once you’ve reached your deductible.
Retirement can be complicated, but you don’t have to plan alone. Talk to a Certified Financial Planner today for help with Social Security, private and employer-sponsored retirement plans, and Medicare.