The standard Medicare Part B premium increased to $135.50 per month in 2019, up from $134 in 2018.
The premium went up even more for higher income earners who pay an income-related monthly adjustment amount (IRMAA), with the most expensive Part B premium increasing from $428.60 per month in 2018 to $460.50 per month in 2019.
This guide helps to explain why the Medicare Part B (medical insurance) premium typically will go up each year, as well as some ways you may be able to save on some of your out-of-pocket Medicare costs.
The Part B premium is hardly the only Medicare cost that will go up every year.
The Medicare Part A (hospital insurance) premium also increases annually for those who are required to pay it. Medicare Part A and Part B deductibles typically increase each year, as well.
Medicare Part B coinsurance costs tend to remain steady at 20 percent of the Medicare-approved amount for a medical service or item, but that 20 percent share can go up as related health care industry costs increase each year.
There are a number of contributing factors to why Medicare costs go up each year, such as:
When you add it all up, you have fewer people paying Medicare taxes that support an increasing number of Medicare beneficiaries who are themselves living longer and being charged more for their care.
Increasing the Part B premium is one way that these rising costs are partially addressed.
Approximately 27 percent of Medicare Part B funding in 2017 came from beneficiaries’ premiums. Nearly 71 percent of Part B funding in 2017 came from general revenue, which consists mostly of federal income taxes.
Increasing the Part B premium by only a small percentage for each beneficiary can raise tens of millions of dollars for the Medicare program.
Your Medicare premiums aren’t the only thing that will go up each year: your Social Security benefit payment will typically also increase each year.
The Social Security Administration (SSA) uses the consumer price index for workers (CPI-W) to make annual adjustments to benefit payment amounts. This is called the cost of living adjustment, or COLA, and is a way to help benefit payments keep up with the cost of living.
The cost of health care often rises faster than inflation, however. Fortunately, the “hold harmless” rule prevents Medicare premiums from increasing by a higher amount than the Social Security COLA.
The hold harmless rule does not apply to you, however, if:
If you pay a Part B late enrollment penalty, your penalty cannot be waived as part of the hold harmless rule. In fact, your late enrollment penalty will increase according to how much the Part B premium will go up each year.
If you’re concerned about the rising cost of Medicare, you can consider a few options that may be able to help you save on your out-of-pocket Medicare costs:
If you have questions about you Part B premium or would like to learn more about how a Medicare Advantage plan can help you save on your health care costs, contact a licensed insurance agent today by calling TTY Users: 711 24 hours a day, 7 days a week.
1 Bergman, Adam. Social Security Feels Pinch as Baby Boomers Clock Out for Good. (Jun. 21, 2018). Forbes. Retrieved from www.forbes.com/sites/greatspeculations/2018/06/21/social-security-feels-pinch-as-baby-boomers-clock-out-for-good/#f5bc5b449951.