Medicare Beneficiaries Out-of-Pocket Expense Rises in the New Year
Medicare beneficiaries in the U.S are hit in the pocketbook in 2020 with medicare premiums and deductibles see an increase in coverage for medical services and prescription drugs. The U.S. Centers for Medicare and Medicaid Services announced that the standard monthly premium for Medicare Part B rises $9.10, to $144 a month and even the annual deductible for Part B increases $13 to $198 per year. Compared to the last year, 2019 increment both of these increases are comparatively large as last year Part B premium rose $1.50 a month and the deductible $2 for the year.
The unusual increase in the Part B premium could be a real problem especially for people living on a fixed income. This increase in premium price will not only affect people enrolled in original Medicare but also people who are covered under Medicare Advantage. In 2020, even the annual inpatient hospital deductible for Medicare Part A increased to $1,408 a year, which is an increase of $44 whereas, in 2019, the increase was $24. As per the CBS News, the 1.6% increase in cost-of-living for Social Security benefits in 2020 will be much wiped out with these increases in the premium and deductible amount. For the average retiree cost-of-living amounts to about $24 extra every month.
As per the experts, even the prescription benefit in Medicare Part D will draw more money from seniors who take expensive drugs, until and unless Congress acts upon it. Till now the ACA included a provision according to which there was a limitation on seniors with Medicare Part D out-of-the-pocket expenses after reaching a “catastrophic coverage”. After reaching that threshold, seniors used to pay only 5% of their prescription costs, until then they used to pay 25% of the costs for branded drugs and 37% of the costs for generic drugs. But after the expiry of this ACA provision this year, the catastrophic coverage threshold is expected to jump $1,250, as per the Kaiser Family Foundation estimates. The jump in the threshold will mean that people taking expensive drugs have to pay more before availing this additional help.
Neuman and Lipschutz said, both the House of Representatives and the Senate have bills in the works to address this Part D increase but it is too early to determine that whether Congress will cooperate on this or not. However, something need to be done about the high cost of prescription drugs. According to CMS, it is not all bad news in the new year for Medicare beneficiaries, as Medicare Advantage enrollees are expected to pay lower premiums despite increase in Part B, according to the CMS. Medicare Advantage premiums are expected to be lowest in the last 13 years and are 23% lower compared to 2018, according to the CMS. Enrollees of Medicare Advantage plans will have access to 28 plans compared to 18 plans available plans in 2014.