Big Changes for Medicare 2020
It is especially important to review all of your coverage this fall. There are several changes to Medicare and you need to make sure you do not encounter any surprises when it comes time to use your benefits next year.
Let's first start with Part B. If your yearly income is higher than $85,000, you can expect to pay a higher premium than you did in 2019. This is determined by looking back to your income from 2017 (two years) to see if it exceeds the threshold for additional premiums. The same things goes for prescription drug coverage. If your Part D premium is adjusted because of your monthly income, often referred to as IRMAA, you can expect it to increase.
Prescription drug coverage has had many changes this year too! The chart below compares current costs for this year against 2020. As with all things Medicare, this is what we know today.
Part D Benefit Parameters
Initial Coverage Limit
Total Covered Part D Spending at Out-of-Pocket Threshold for Non-Applicable Beneficiaries
Estimated Total Covered Part D Spending for Applicable Beneficiaries
Minimum Cost-Sharing in Catastrophic Coverage Portion of the Benefit
Generic/Preferred Multi-Source Drug
Other (i.e.name brand drugs)
Where is the donut hole? The coverage gap or donut hole has closed one year early because of the Bipartisan Budget Act of 2018. This legislation reduces the standard beneficiary cost sharing in this phase from 30 to 25 percent. It also increases pharmaceutical manufacturers discount in the coverage gap discount program from 50 to 70 percent of the negotiated price of applicable drugs resulting in lower costs to part D plan sponsors.
Advantage Plans can now offer extra benefits that are not covered under Medicare A and B, if they diagnose, compensate for physical impairments, diminish the impact of injuries or health conditions, and/or reduce avoidable emergency room utilization. These benefits can address many of the social determinants of health for beneficiaries with chronic disease. Some examples may include meal delivery, transportation and other home services that improve the beneficiaries overall health and function. The only way to know exactly what these benefits are, and if you have them, is to contact your Advantage Plan for an explanation of these benefits.
Finally, let’s look at supplemental plans also known as Medigap plans. Plans C and F will go away at the end of this year and become D and G respectively. This is only for policies sold to those who are newly Medicare eligible. It is recommended that if you have a plan F, do your homework and research the price of your plan F and compare that with any predicted future increases. You may want to consider moving to a plan G if that will save you more money and if your Plan F allows you to make the change without going through underwriting.
Johnson County Extension offers free unbiased information on Medicare. During Open Enrollment, Oct. 15 through Dec. 7, we will once again offer Part D comparisons either by mail, email or in person.