It's hard to believe that we have put another Medicare Annual Enrollment Period (AEP), and decade, to bed. It's now time to focus on 2020. We have had some disruptions sprung on us in the Medicare world (hello, Medicare.gov Plan Finder changes!), but we have been relatively lucky to have been given a head up of changes to come. Below we have outlined the major changes that will be affecting your clients beginning in 2020.
Medigap Plans C and F that cover the Part B deductible will no longer be available for purchase by newly eligible Medicare beneficiaries as of January 2020.
This rule change was part of MACRA (the Medicare Access and CHIP Reauthorization Act of 2015). When a person has Medigap Plan C or Plan F, they can receive all Part B services without any out-of-pocket costs. But if they have a Medigap plan that doesn't cover the Part B deductible, they have to pay at least $198 for Part B services in 2020. People who already have Medigap Plans C and F will be able to keep them, and people who are already eligible for Medicare prior to 2020 will still be able to buy those plans. But for newly-eligible enrollees, Plan C and Plan F will be discontinued after the end of 2019.
Medicare Part B premiums are increasing.
The standard Part B premium is $144.60/month in 2020, up from $135.50/month in 2019. And the Social Security cost of living adjustment (COLA) was enough to cover the full cost of the premium increase for most enrollees.
The donut hole is being eliminated in 2020 for generic drugs.
(It was eliminated one year ahead of schedule, in 2019, for brand-name drugs). The gap in prescription drug coverage starts when someone reaches the initial coverage limit ($4,020 in 2020), and ends when they have spent $6,350. Prior to 2011, Medicare Part D enrollees paid the full cost of their medications while in the donut hole. But the ACA has been steadily closing the donut hole, and it will be fully closed by 2020, when enrollees in standard Part D plans will pay just 25% of the cost of their drugs all the way up to the catastrophic coverage threshold. Although the donut hole is closing in terms of the maximum amount that enrollees pay at the pharmacy, it continues to be relevant in terms of how drug costs are counted for the purpose of reaching the catastrophic coverage level, and in terms of who actually covers those costs. Before the enrollee reaches the donut hole, the Part D plan covers the majority of the cost. Once they reach the donut hole, the drug manufacturer covers the majority of the cost. The Medicare Part D maximum deductible is $435 for 2020.
The high-income threshold has been adjusted for inflation.
Enrollees with high incomes pay higher premiums for Medicare Part B and Part D. For years, the threshold has been set at $85,000 for a single person, and $170,000 for a couple. In 2020, the income-related monthly adjustment amount (IRMAA) will only be added to premiums when an enrollee's income exceeds $87,000 (or $174,000 for a couple).
The Medicare Offerings team is here to help with any additional questions you may have on the new Medicare guidelines. Comment below with your questions or concerns, or contact us at 717-540-5690 x5.