On November 8, 2019, the Centers for Medicare and Medicaid Services announced that the Part B premium, which covers doctors’ visits and outpatient care, will increase from $135.50 per month to $144.60 per month beginning in January, 2020. The increase of $9.10 per month follows a $1.50 per month increase that took effect at the beginning of 2019.
The $144.60 premium applies to beneficiaries who file their taxes individually and are taxed on $87,000 or less and for those filing jointly, $174,000 or less. Upper-income retirees who pay higher premiums will also see an increase in premium rates, with the wealthiest couples paying a total of nearly $1,000 per month in Medicare Part B premiums.
Additionally, the deductible for Part B coverage will go from $185 to $198 in 2020, an increase of 7%.
Each year, CMS adjusts the Medicare premiums, deductibles, and copayment rates according to the Social Security Act. The increases for 2020 are largely a response to rising spending on physician-administered drugs, which results in higher costs.
The announcement came nearly a month after the Social Security Administration set a modest 1.6% cost-of- living adjustment to benefits in 2020, which works out to approximately $24 a month for the average retired worker. Since Part B premiums are typically deducted from monthly Social Security checks, the higher Medicare Part B premium will cut into retirees’ monthly Social Security payments.
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