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Financial Advisors and Retirement Planners for Attorneys and Couples

Medicare Changes Coming In 2020

By Darren Wurz

 

There’s always excitement surrounding the turn of a new year and anticipation of what is to come. What surprises does fate have in store for this coming decade? It’s usually just a guess at what the future may hold.

 

However, when it comes to Medicare, we don’t have to guess what 2020 will look like. There are a number of changes this year, and you won’t escape being affected by them. This is what 2020 has in store on the Medicare front:

Costs

A number of Medicare costs are increasing for 2020. While most people get Part A premium-free, those who do pay will now be paying $458. The Part A deductible has also increased to $1,408. Coinsurance rates for Part A have increased as well, and the rates vary depending on the length of inpatient care.

 

Part B premiums have gone up a little over $9 a month and are now $144.60. This won’t lower your Social Security check, though, because Social Security benefits have received a 1.6% cost-of-living adjustment for 2020 that will offset the increase in premiums. In addition, the deductible for Part B is increasing to $198. 

Supplement Plan Availability

Medigap supplement Plan F and Plan C will no longer be available to those becoming eligible for Medicare after December 31, 2019. This is because back in 2015, Congress decided that medical care recipients should have some skin in the game in order to limit unnecessary care and, therefore, costs. Supplement Plans F and C cover the cost of the Part B deductible, so they are no longer allowed.

 

If you already have a Part F or Part C plan, you are allowed to keep it. Anyone who became eligible for Medicare before January 1, 2020, is exempt from the law change. You can have one of those plans and can also switch freely from one plan to another without risking loss of eligibility. Even if you don’t currently have a Medigap plan, you can still purchase a Part F or Part C plan if you were eligible for Medicare prior to January 1.

Medicare Part D Donut Hole

Previously, there was a time when you would have to pay 100% of your prescription drug costs despite having Medicare Part D coverage. This was dubbed the “Donut Hole.” The Affordable Care Act has been closing the donut hole, and it will be completely closed in 2020. 

 

The maximum allowable deductible for Part D coverage has gone up to $435 this year. Once that deductible is reached, you will no longer have to pay 100% of the cost of your generic and brand-name drugs until you reach the new catastrophic coverage threshold of $6,350. Now you will only have to pay 25% before reaching the new coverage threshold. 

How The Medicare Changes Will Affect Your Financial Plan

These changes to Medicare for 2020 affect all participants. While some people only face minor changes (increased premiums and deductibles), it could mean major changes for new enrollees who were planning on purchasing Medigap coverage. 

 

Times of change are always a good opportunity to review your current financial plan and make any necessary adaptations. If you don’t already have a financial plan, these changes should serve as a reminder of why you need one! Having a plan in place will give you the confidence that you can retire comfortably and that you are prepared for changes like these and whatever else life may throw your way. If you need a plan or want to review your current one, we can help. Schedule a no-obligation consultation by calling 859-291-9879 or emailing dpw@wurzfinancialservices.com. Or get to know us first by joining us at one or both of our free webinars by clicking the following links: 

 

 

We also have the following event coming up. Please come join us!

How To Plan for Medical Costs in Retirement

When: Tuesday, February 25th, 5:30-6:30pm

One of the biggest planning questions we get is how to plan for health costs in retirement—especially for people who plan on retiring before Medicare age (65). And even though Medicare helps, there is a lot that it doesn’t cover and a lot that individuals still have to pay for. In this workshop, we’ll explain how Medicare works, show you how to estimate your future healthcare costs and share some important planning tips.

About Darren

Darren Wurz is a co-owner and financial planner at Wurz Financial Services, an independent, family-owned and operated financial services firm dedicated to helping its clients transition from their working life to a comfortable retirement with confidence. Darren received his master’s of science in financial planning from Golden Gate University and also holds the CERTIFIED FINANCIAL PLANNER™ (CFP®) designation. He operates the Northern Kentucky/Cincinnati office of Wurz Financial Services and is an active member of the Covington, KY rotary club, the Northern Kentucky Chamber of Commerce, and the Covington Business Council. To learn more about Darren, connect with him on LinkedIn.

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