On November 11th, the Centers for Medicare and Medicaid Services announced that for calendar year 2020 Medicare part B premiums, which cover doctor fees and outpatient services, will increase by $9.10 per month to $144.60.
This is a much higher increase than what we experienced the previous year, when Medicare part B premiums only rose by $1.50. Combined with a Social Security cost-of-living adjustment that increased 1.6%, compared to 2.8% the previous year, the net effect is to have a much smaller increase in net Social Security benefits for our retired clients.
Those Medicare beneficiaries who have higher incomes in retirement will also pay higher surcharges on their Medicare part B and part D prescription drug benefits. This is due to the income-related monthly adjustment amount or IRMAA. The only good news is that for the first time in a decade, the income brackets used to determine those surcharges are being indexed to inflation. This is the first time the income brackets for Medicare surcharges have increased since 2011. We have included a copy of the IRMAA income brackets and surcharges below for your reference.
As Social Security and Medicare benefits play a major role in both income and expenses for our retired clients, please do not hesitate to reach out to us to discuss how this impacts your particular situation. It is important to understand how these issues impact your retirement cashflow as we continue "Moving Life Forward" together.