Medicare makes changes to its costs and benefits almost every year and there are quite a few in 2020. Some, such as the elimination of two of the most popular Medicare Supplement Plans, have been in the works for a long time.
Other Medicare changes, such as the expanded telemedicine benefits, were approved in response to the coronavirus pandemic.
If you’re trying to make sense of your Medicare benefits in 2020, here’s what you need to know.
Medicare changes at a glance:
- Premiums for Part A and Part B have increased slightly in 2020
- Deductibles for Part A and Part B have increased slightly in 2020
- Average premiums for Medicare Advantage are lower in 2020
- Average premiums for Medicare Part D are lower in 2020
- People eligible for Medicare as of January 1, 2020, won’t be able to buy Plan C or Plan F
- Expanded benefits for Original Medicare
- New benefit options for Medicare Advantage
What are Medicare premiums for 2020?
Premiums for both Part A and Part B increased slightly in 2020. If you are one of the few who doesn’t qualify for premium-free Part A, your new Part A premium is $458. The standard Part B premium increased by about $9 to $144.60.
If you pay the income-related monthly adjustment amount (IRMAA) with your Part B premium, you’ll be pleasantly surprised. The adjustment amounts have decreased slightly compared to 2019, and the income threshold has increased from $85,000 to $87,000 for singles and $174,000 for married couples.
Remember, the IRMAA is assessed based on your 2018 tax return, so if your income has changed significantly in the last year, be sure to let Medicare know. You may be able to have the IRMAA removed.
What are Medicare deductibles for 2020?
The $44 hike in the Part A deductible is one of the biggest Medicare cost changes for 2020. The new Part A deductible is $1,408, up from $1,364 in 2019. Remember, the Part A deductible is per benefit period, not per calendar year, so you can pay the Part A deductible several times a year if you have multiple hospitalizations.
The daily coinsurance for days 61 through 90 also increased slightly to $352. The coinsurance for lifetime reserve days jumped by $22 in 2020 to $704.
After three years of stability aside from a $2 increase in 2019, the Part B deductible went up by $13 in 2020 to $198.
Medicare coronavirus coverage changes for 2020
The most noteworthy changes to your Medicare coverage this year relate to the COVID-19 pandemic. The Families First Coronavirus Response Act included provisions to help seniors get the care they need. Specifically:
- Coronavirus testing is free to Medicare beneficiaries; providers have been directed to waive cost-sharing for these tests and the deductible doesn’t apply.
- The coronavirus vaccine will be free to Medicare enrollees once it becomes available.
- There is expanded coverage for inpatient hospital days for individuals who need to remain under quarantine due to coronavirus. In the past, Medicare wouldn’t pay for inpatient days when a patient was medically cleared for discharge. Now, however, if you need to remain in the hospital to comply with COVID-19 treatment guidelines, Medicare will pay for inpatient coronavirus quarantine.
- Medicare now covers telemedicine services including video and phone consultations and e-health check-ins. You can use telehealth for any healthcare need, not just coronavirus-related services.
- Medicare has authorized providers to waive all cost-sharing for coronavirus-related services.
- All Part D plans are directed to provide a 90-day supply of prescriptions if requested and waive any quantity limits while social distancing guidelines are in place.
Medicare Supplement Plan changes in 2020
This particular Medicare change has been in the works for several years, but it finally went into effect on January 1, 2020. The Medicare and CHIP Reauthorization Act of 2015 outlawed Medigap plans that covered the Part B deductible. Two of the most popular plans, Plan C and Plan F, are no longer available to new Medicare beneficiaries.
If you already have one of these plans and want to keep it after the deadline, you can. You may even be able to buy a new plan in 2020 if you first became eligible for Medicare in the final months of 2019 and Plan C or Plan F is the first Medicare Supplement Plan you buy. But if you become eligible for Medicare on or after January 1, 2020, you’re out of luck.
This Medicare Supplement Plan change doesn’t mean you can’t get comprehensive coverage, however. Plan G has all the same benefits as Plan F except the Part B deductible, so you’ll be well covered when it comes to your out-of-pocket costs.
Medicare Supplement Plans are sold by private insurance companies, so there is no standard plan premium. However, data collected by the insurance industry suggests that Medigap plan premiums increase an average of 5% to 8% a year.
Since Medigap benefits are standardized by the government, it pays to comparison-shop your Medigap coverage. Plan G offered by Aetna is essentially the same as Plan G offered by Humana; the only significant difference is the plan premium.
Aside from the COVID-19 changes for Part D plans, the biggest change in the program is that most people will have a lot more choices. According to data from the Centers for Medicare and Medicaid Services (CMS), the average Medicare enrollee will be able to choose from 28 stand-alone prescription drug plans. That’s an increase of almost 30%.
Kaiser Family Foundation research shows that average Part D premiums will range from $13 for value plans to $83 a month for choice plans. The base Part D premium, which is used for calculating late enrollment penalties and IRMAA, is $32.74 in 2020. The maximum deductible for 2020 is $435.
If you have a Medicare Advantage plan, your prescription drug coverage is generally included and you won’t pay a separate monthly premium for Part D.
2020 represents the final year in the 10-year plan to close the donut hole. Technically, the donut hole is closed, but that doesn’t mean your medications are free once you hit the coverage gap. Closing the donut hole stabilized the cost-sharing structure and aligned it with the cost-sharing framework for the initial coverage phase.
The major Medicare donut hole change in 2020 is that you now pay 25% of your actual prescription drug costs in the coverage gap; your insurer and the drug company pays the other 75%. The threshold to enter catastrophic coverage also increased in 2020 to $6,350.
The good news is that 90% of Medicare beneficiaries don’t have to worry about the donut hole because they don’t hit the cost threshold. Only 5% enter the catastrophic coverage stage.
Although Original Medicare is still preferred by roughly 60% of beneficiaries, enrollment in Medicare Advantage is up in 2020 by roughly 30%. The average Medicare enrollee can choose from among 39 plans, a 50% increase since 2017.
Medicare Advantage premiums continued to go down in 2020 by an average of 14% according to CMS data. Many people have access to zero-premium Medicare Advantage plans. Keep in mind, however, that you continue to pay your Part B premium even if you enroll in Medicare Advantage.
New expanded benefits for Medicare Advantage
The biggest changes in Medicare Advantage for 2020 are centered around the expanded benefit options available with many plans. In late 2018, CMS authorized Medicare Advantage plans to beef up benefits that help seniors remain safe and healthy at home.
These expanded benefits include:
- Coverage for non-medical transportation, up to a certain number of trips per year, for things such as doctor visits, therapy appointments, and trips to the pharmacy
- In-home meal and grocery delivery
- Home modifications such as wheelchair ramps, air purification, and bathroom safety bars
- Home assistance with custodial care and housekeeping
- Respite care including adult daycare
- Monthly allowance for over-the-counter medications and devices
These new benefits aren’t mandatory, but most major insurers such as UnitedHealthcare, Humana, Aetna, and Cigna have added some of these new benefits into their plans. If these expanded benefits are important to you, it’s worth exploring the plan options in your area.
Planning for Medicare changes
Medicare is actually really great insurance; over 90% of Medicare enrollees are satisfied with their coverage. The coverage frequently changes, but always for the better. CMS stays on top of medical research and recommendations and alters its coverage guidelines to make sure seniors get the care they need.
You can stay on top of Medicare changes by carefully reading your Annual Notice of Change (ANOC). CMS requires Medicare plan providers to notify enrollees of any coverage changes by September 30.
It’s also a good idea to re-evaluate your Medicare plan every year during the fall Annual Election Period. That way, you won’t miss out on new plan and benefit options and you’ll know you’re getting the best coverage for your needs.
As always, the Boomer Benefits team is here to help. Contact us today!