The 2020 Part B Medicare premiums increased $9.10 to $144.60 a month as announced by The Centers for Medicare and Medicaid Services (CMS). However, some Social Security recipients who were protected from increases in previous years will have increases in 2020. These increases will be offset by social social security increases due to the Hold Harmless rule (more on that below).
If you paid less than $135.50/month in 2019 than you must use all or a portion of your 2020 1.6% COLA increase to get to the $144.60 monthly payment. To understand how this works you must first know that your Medicare Part B premium is deducted from your Social Security benefits.
How to Determine Your Part B Medicare Premiums?
If you paid $135.50/month in 2019 your increase will be $9.10. If you paid less than that amount here is how to determine your payment.
Step 1: Subtract $144.60 from your current Part B Premium. Example 1: $144.60 – $100 = $44.60; Example 2: $144.60 – $130 = $14.60
Step 2: Multiply your current monthly Social Security benefit by 1.6%. Example 1: $1,600 x .016 = $25.60; Example 2: $1,600 x .016 = $25.60
Step 3: Your Part B Premium increase will be the smaller of the two numbers from Step 1 and 2.
Example 1: Step 2 is smaller. The recipient would pay $125.60/month ($100 + 25.60) in Part B Medicare but receive no benefit from the COLA increase.
Example 2: Step 1 is smaller. The recipient would pay the maximum $144.60/month in Part B Medicare and receive a $10/month increase in social security benefits.
What is the Hold Harmless Provision?
Quick Answer: Increases in Medicare premiums can’t cause a person’s Social Security benefits to decline from one year to the next.
Longer Answer: The Hold Harmless rule prevents Social Security recipients from paying higher Part B premium costs so long as:
- You do not receive a Cost of Living Adjustment (COLA) large enough to cover the increased premium.
- You were entitled to Social Security benefits for November and December of the previous year.
- The Medicare Part B premium will be or was deducted from your Social Security benefits in November of the previous year through January of the current year.
- You don’t already pay higher Part B premiums because of Income-Related Monthly Adjustment Amount (IRMAA) eligibility.
The hold harmless provision does NOT protect you if:
- You are new to Medicare.
- You are subject to IRMAA.
- You are enrolled in a Medicare Savings Program (MSP).
- Were enrolled in a Medicare Savings Program in prior but lost the program because your income increased or you failed to recertify.
2020 Medicare Part A Premiums
About 99% of the people do not pay Part A premiums since most people have at least 40 quarters of Medicare-covered employment.
- $1,408.00 – Inpatient hospital deductible
- $352.00 – Daily coinsurance for 61st-90th Day
- $704.00 – Daily coinsurance for lifetime reserve days
- $176.00 – Skilled Nursing Facility coinsurance
2020 Medicare Part B Premiums
A beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts (IRMAA) affect roughly 5 percent of people with Medicare Part B. The total premiums for high income beneficiaries for 2019 are shown in the following table:| Beneficiaries who file individual tax returns with income: | Beneficiaries who file joint tax returns with income: | Income-related monthly adjustment amount | Total monthly premium amount |
|---|---|---|---|
| Less than or equal to $87,000 | Less than or equal to $174,000 | $0 | $144.60 |
| Greater than $87,000 and less than or equal to $109,000 | Greater than $174,000 and less than or equal to $218,000 | $57.80 | $202.40 |
| Greater than $109,000 and less than or equal to $136,000 | Greater than $218,000 and less than or equal to $272,000 | $144.60 | $289.20 |
| Greater than $136,000 and less than or equal to $163,000 | Greater than $272,000 and less than or equal to $326,000 | $231.40 | $376.00 |
| Greater than $163,000 and less than $500,000 | Greater than $326,000 and less than $750,000 | $318.10 | $462.70 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | $347.00 | $491.60 |
| Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses: | Income-related monthly adjustment amount | Total monthly premium amount | |
| Less than or equal to $87,000 | $0 | $144.60 | |
| Greater than $87,000 and less than $413,000 | $318.10 | $462.70 | |
| Greater than or equal to $413,000 | $347.00 | $491.60 |
2020 Medicare Advantage (aka Medicare Part C)
2020 Medicare Part D Prescription Drug Plan Premium
Part A & B Medicare Definitions
Medicare Part A: Covers inpatient hospital, skilled nursing facility, and some home health care services.
Medicare Part B: Covers preventive care, physician services, outpatient hospital services, certain home health services, durable medical equipment, metal health care and other items.
Medicare Part C: Medicare Advantage plans are sometimes referred to as Medicare Part C. They are Medicare-approved private health insurance plans for individuals enrolled in Original Medicare, Part A and Part B.
Medicare Part D: Also called the Medicare prescription drug benefit, is an optional program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums (the cost of almost all professionally administered prescriptions is covered under optional Part B of United States Medicare).
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