What's Changing in Medicare for 2020?
You might already have some questions about how policies and premiums are going to change for Medicare in 2020. On October 1st the 2020 Medicare Advantage and Prescription Drug plan details will be released but the financial structure the plans follow was recently announced.
- The maximum deductible for drug plans is going from $415 to $435.
- Threshold to enter the coverage gap (donut hole) is changing from $3,820 to $4,020
- Threshold to get out of the coverage gap and into catastrophic coverage is being significantly increased from $5,100 to $6,350.
- The average drug plan premium is projected to decline.
These 2020 Medicare changes will affect beneficiaries who hit the coverage gap (donut hole) the most. This is because once you hit the coverage gap you owe 25% of the cost for brand name medications until the collective cost of what you’ve paid for your drugs plus the manufacturer discount on the drugs hits a threshold that changes annually. This threshold is being raised by $1,250 and is now $6,350! After you’ve reached the threshold you hit the “catastrophic phase of coverage” and owe much less for the costs of the drugs, but now that is harder to reach.
How is Medigap Changing in 2020?
The Medicare Accesses and CHIP Reauthorization Act of 2015 (MACRA) declared that as of January 1st, 2020, new Medicare recipients could no longer purchase Medigap plans that cover the Part B deductible, meaning that plans C, F, and the high-deductible F plan will no longer be available to them. However, if you were 65 before January 2020 you will still be able to enroll in these plans. Additionally if you are already enrolled in one of these options you can continue
Will Original Medicare Costs Change in 2020?
As of August of 2019, no clear projections have been made as to how costs may change in the coming year, but you can deduce based on the patterns seen in previous years.
It is very likely that some changes in premium costs will be seen in Original Medicare plans in the coming year, but no information suggests an extreme increase. In 2018, standard premium costs for Medicare part B ranged around $134 a month, and in 2019, the price went up roughly $1.50 on average.
Annual deductibles for part B also only saw about a $2 increase between 2018 and 2019, going from $183 to $185. Additionally the Medicare Hold Harmless Provision prevents Medicare from raising recipients' premiums above their Social Security cost of living increase.
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