New Medicare changes that will impact both current and future beneficiaries have now gone into effect. Keep your clients informed and help them make the best choices by staying up-to-date on these changes.
Increased Medicare Deductibles & Premiums
The first change to note is an increase in Medicare Part B premiums and deductibles. The new rates are:
- Medicare Part A Hospital Deductible for the first 60 days of inpatient hospital care in a benefit period has gone up $44 from 2019 to $1,408.
- Medicare Part A Deductible for a Skilled Nursing Facility for days 21-100 has gone up $5.50 per day since last year. The cost is now $176 per day.
- Medicare Part B Deductible has gone up $13 from 2019 to $198.
- Medicare Part B Premiums have gone up $9.10 from 2019. Premiums are now $144.60 a month.
- Coinsurance for the 61st-90th day of hospitalization in a benefit period has gone up $9 per day from 2019, now costing $352 per day. For lifetime reserve days, coinsurance has gone up $22 per day from 2019, now costing $704 per day.
New IRMAA Bracket
In 2019, the income threshold for Medicare’s IRMAA (income-related monthly adjustment amount) was $85,000 for an individual and $170,000 for a couple filing taxes jointly. The threshold in 2020 has risen to $87,000 for individuals and $174,000 for couples.
No More First-Dollar Coverage Plans
One big change for Medicare this year is the disappearance of first-dollar coverage plans. Medicare Supplement Plans C, F and High-Deductible Plan F, which are considered first-dollar and all have zero out-of-pocket costs, will no longer be offered to new Medicare beneficiaries. Seniors who were on Plans C and F prior to 2020 will be allowed to stay on their plans.
Congress is hoping to save money by getting rid of these plans. They feel that Medicare beneficiaries may overuse healthcare services if they aren’t paying any out-of-pocket costs, so now all plans will be required to have a deductible. The hope is that beneficiaries will think twice about unnecessary doctor visits, which will help cut down on Medicare spending.
One alternative to these plans is Plan N, which is a cost-sharing plan. Beneficiaries will have a copay of up to $20 for doctor visits and $50 for emergency room care. Urgent care visits have no copays. Plan G is also a good option because it is most similar to Plan F. It offers most of the benefits of Plan F but with lower premiums.
New High Deductible Plan G Is Here
High-deductible Plan G is the 2020 replacement for the disappearing High-Deductible Plan F. High-Deductible Plan G’s deductible is $2,340 for the year (the same deductible as High Deductible Plan F), and any beneficiary can sign up for it whether or not they were “Medicare -eligible” before 2020.
The main difference between High Deductible Plan F and High Deductible Plan G will be the coverage options. Currently, HD Plan F covers the Part B deductible, whereas HD Plan G doesn’t. The benefits a beneficiary will receive with this new plan are:
- Part B excess charges
- Foreign travel emergency (up to plan limits)
- Skilled nursing facility care coinsurance
- Part A hospice care coinsurance or copayment
- The first 3 pints of blood received
- Part B coinsurance or copayment
- Part A coinsurance and hospital costs (up to an additional 365 days after Medicare benefits are used)
- Durable Medical Equipment (DME)