A jump in the cost of Medicare Part B premiums is going to put a dent in the Social Security checks of some recipients next year.
The standard monthly premium for enrollees will be $144.60 in 2020, almost $10 a month more than the current $135.50, according to the Centers for Medicare & Medicaid Services, which recently released the figures. It’s also a marked difference from last year’s average increase of $1.50.
Medicare is the federal health insurance plan that serves more than 60 million people. About 52 million are people aged 65 or older, and another seven-plus million are younger people with disabilities. Part B includes doctor visits, tests and screenings, as well as other outpatient services.
Most recipients do not pay for Medicare Part A, which covers hospitalization.
In a statement, the Centers for Medicare & Medicaid Services said the increase was “largely due to rising spending on physician-administered drugs.”
“These higher costs have a ripple effect and result in higher Part B premiums and deductible,” the statement read.
For many people enrolled in Medicare, the premium is automatically deducted from their monthly Social Security checks.
And while there is a 1.6% cost-of-living adjustment boost to next year’s Social Security benefits, a chunk of that will go toward paying the larger Part B premium, which is increasing nearly 7%. The estimated monthly Social Security benefit for an individual would grow to $1,503 from $1,479, and to $2,531 from $2,491 for a couple.
“It’s getting completely out of hand,” said Bernard Macias, associate state director of AARP — Long Island. “We pay the highest prices in the world for medicine.”
Macias said AARP has launched a statewide and national campaign titled “Stop RX Greed,” aimed at pressuring elected officials to pass legislation that would lower the price of some prescription drugs and make it easier to import some medicines.
“We need to open our eyes and realize a lot more retirees on Long Island want to stay on Long Island, but it’s getting harder and harder to do that,” he said.
The state of New York is home to about 3.6 million Medicare recipients, with more than 500,000 living in Nassau and Suffolk counties.
The $144.60 standard monthly premium cost of Part B is based on an individual who makes $87,000 or less a year or joint filers who make $174,000 or less. There are additional fees for Medicare recipients with higher incomes as well as programs to help those with lower incomes pay for the premium.
Beneficiaries also will see a 7% jump in their annual Part B deductible, to $198, from $185.
Kata Kertesz, policy attorney at the Center for Medicare Advocacy, a nonprofit law organization that helps people access Medicare, said they believe it’s not just drug prices that are boosting premiums but that more hospitals are billing Medicare Part B instead of Medicare Part A for services in those facilities.
She pointed to recent reports that show “large and increasing numbers of beneficiaries in traditional Medicare are classified as outpatients in observation when they are receiving medically necessary care in the hospital.”
The Kaiser Family Foundation released a study earlier this month that showed the average person with Medicare coverage spent $5,460 out of pocket for health care in 2016.
There is often a misperception that retirees can easily weather these yearly hikes, noted Casey Schwarz, senior counsel, education and federal policy at the nonprofit Medicare Rights Center.
“People are living on a limited budget and increases to health care costs definitely have an impact on them,” Schwarz said.