CMS Announces 2020 Medicare Premiums

Nov 12, 2019 / Amanda Chase, Horsesmouth Assistant Editor

On November 8, 2019, the Centers for Medicare & Medicaid Services (CMS) released the 2020 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs. Each year the Medicare rates are adjusted according to the Social Security Act. For 2020, the Medicare Part B monthly premiums and the annual deductible are higher than the 2019 amounts. The standard monthly premium for Medicare Part B enrollees will be $144.60 for 2020, an increase of $9.10 from $135.50 in 2019. The annual deductible for all Medicare Part B beneficiaries is $198 in 2020, an increase of $13 from the annual deductible of $185 in 2019.

The increase in the Part B premiums and deductible is largely due to rising spending on physician-administered drugs. These higher costs have a ripple effect and result in higher Part B premiums and deductible. From day one, President Trump has made it a top priority to lower drug prices. Currently, for Part B, the law requires CMS to pay the average sales price for a drug and also pays physicians a percentage of a drug's sale price. This incentivizes drug companies to set prices higher and for physicians to prescribe more expensive drugs—because that leads to a higher Medicare payment. Through the President’s drug pricing blueprint, the Trump Administration is working to lower drug prices in Medicare Part B drugs.

As previously announced, as a result of CMS actions to drive competition, on average for 2020, Medicare Advantage premiums are expected to decline by 23% from 2018, and will be the lowest in the last thirteen years while plan choices, benefits and enrollment continue to increase.

The income-related monthly adjustment amounts (IRMAA), which affect roughly 7% of people with Medicare Part B, were also announced. This is the first year that the income brackets are adusted for inflation. Couples with income above $174,000 will pay more for their premiums each month, compared to $170,000 of income in 2019.

 

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