When the Social Security and Medicare Trustees’ Report was released a few weeks ago, the news that the Medicare Part A hospital insurance trust fund is expected to go broke in 2026 obscured other important information in the report.
In particular, the report contained preliminary numbers for an increase in Medicare Part B premiums and a slight cost-of-living increase for Social Security recipients.
The 2020 Part B premium, which pays for doctor fees and outpatient services, is expected to go up by $8.80 to $144.30 per month. The Medicare Trustees expect the monthly Medicare premium to more than double by 2028, increasing to $226.30.
Also, in 2020, more high-income Medicare beneficiaries will likely pay income-related monthly adjustments or IRMAA. In plain English that means the more you make, the higher your Medicare premium could be because the government will begin indexing income for inflation. People affected are individuals with modified adjusted gross income above $85,000 and married couples above $170,000. The IRMAA surcharges could increase Part B premiums by an additional $189.60 to $460.80 per month. High-income beneficiaries also have surcharges applied to their Part D prescription drug costs.
Social Security anticipates a cost-of-living adjustment of 1.2% in 2020. The average Social Security benefit would increase by $17 a month, however, for millions of lower-income beneficiaries, most or all of the COLA will be eaten up by the increase in Medicare premiums.