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Medicare Costs For 2020
2020 Medicare Made Easy
How much is Medicare Part A? Part A is no additional charge for most people. However, Part B and Part D will have a monthly premium.
The costs for Medicare Part B and Part D, as well as any supplemental coverage, is something that many will not anticipate. Do not be surprised when you turn 65 and learn that Medicare is not free.
Do you have to pay for Medicare? Yes, most people will pay Medicare premiums. Fortunately, it’s fairly easy to get together a Medicare cost estimate so that you can plan ahead.
Medicare Cost for Part A in 2020
For most people the cost for Medicare Part A is usually zero. As long as you have worked 10 or more years (40 quarters) in the U.S., you have already paid for Part A through payroll taxes. Statistically 99% of Medicare beneficiaries qualify for Part A at no costs
If you have to purchase Part A, the cost for Medicare Part A will be up to $458 monthly. People with less than 40 quarters work experience but more than 30 quarters will be a pro-rated premium of $252 Monthly.
If you were to have a hospital stay in 2020, your Part A Deductible will be $1,408. Be advised that if you have a Medigap plan, it will likely cover this cost for you.
Medicare Cost for Part B in 2020
Your Household Income is what Medicare Part B Cost is Based on.
2020 Medicare part B premiums
Medicare Part B premiums are based upon your modified, adjusted, household gross income. The Social Security office will pull your IRS tax return from the previous two years. They use those tax returns to calculate what you will pay for Parts B & D. Yes, the Part D premiums for 2020 are also based on income.
The items that contribute to your modified adjusted gross income (MAGI) include any money earned through wages, interest, required minimum dividends from investments, and capital gains. They also include Social Security benefits and tax-deferred pensions. The distributions from Roth IRAs and Roth 401(k)s, life insurance policies, reverse mortgages and health savings accounts are not counted in the MAGI calculation.
If you filed your taxes jointly with a spouse, Social Security will base your premiums for each of you based on that married income. However, each of you will have to pay your own Part B premium. The premiums for Part B are always individual, never combined. Social Security just uses your household income to determine where you fall individually in the Part B premiums chart.
Social Security generally notifies you of your next year’s premium annually, around December or early January, by mail.
Roughly about 5% of all Medicare beneficiaries are currently paying higher Medicare premiums.
What Part B will Cost for Most Enrollees
In 2020 most people new to Medicare will pay $144.60 for their Part B premiums. This is the standard premium that most people pay based on income. Social Security will deduct your Part B premium from your Social Security check each month. If you are not enrolled in Social Security income benefits yet, they will bill you each quarter.
The Medicare Part B deductible for 2020 is $198.
Most Folks Just Pay the Standard Part B Premium
You’ll pay the standard Medicare Part B premium amount if:
- You enroll in Part B for the first time in 2020 or after
- You do not get Social Security benefits
- You are directly billed for your Part B Medicare premiums.
- You have Medicare and Medicaid, and Medicare pays your premium for you. (Your state pays the standard $144.60 premium.)
- Your modified adjusted gross income on your IRS tax return from 2 years ago is above a certain amount. If it is, you will pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an additional charge added to your premium.
Medicare Part B Income-Related Monthly Adjustment Amounts
Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts (IRMAA) affect roughly 7 percent of people with Medicare Part B. The 2020 Part B total premiums for high-income beneficiaries are shown in the following table:
Beneficiaries who file individual tax returns with income: | Beneficiaries who file joint tax returns with income: | Income-related monthly adjustment amount | Total monthly premium amount |
Less than or equal to $87,000 | Less than or equal to $174,000 | $0.00 | $144.60 |
Greater than $87,000 and less than or equal to $109,000 | Greater than $174,000 and less than or equal to $218,000 | 57.80 | 202.40 |
Greater than $109,000 and less than or equal to $136,000 | Greater than $218,000 and less than or equal to $272,000 | 144.60 | 289.20 |
Greater than $136,000 and less than or equal to $163,000 | Greater than $272,000 and less than or equal to $326,000 | 231.40 | 376.00 |
Greater than $163,000 and less than $500,000 | Greater than $326,000 and less than $750,000 | 318.10 | 462.70 |
Greater than or equal to $500,000 | Greater than or equal to $750,000 | 347.00 | 491.60 |
Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses: | Income-related monthly adjustment amount | Total monthly premium amount |
Less than or equal to $87,000 | $0.00 | $144.60 |
Greater than $87,000 and less than $413,000 | 318.10 | 462.70 |
Greater than or equal to $413,000 | 347.00 | 491.60 |
Medicare Cost for Part D in 2020
Just like Part B, your Medicare costs for Part D varies based on your income. Your Medicare Part D Premiums for 2020 also vary by plan. There may be 20 plus plans to choose from.
You may find plans that start around $20 a month. This is the base premium amount for Part D.
You will pay the plans published base premium rate unless you are in the higher income brackets. People who have higher incomes will pay more for Part D. It is important to factor this in if you are comparing the potential costs for Medicare Part D against other insurance, such as employer insurance.
Medicare Part D Premiums Chart for 2020
To determine your Medicare cost for Part D drug plans in 2020, review the table below.
| If your filing status and yearly income in 2018 was | |||
| File individual tax return | File joint tax return | File married & separate tax return | You pay each month (in 2020) |
|---|---|---|---|
| $87,000 or less | $174,000 or less | $87,000 or less | your plan premium |
| above $87,000 up to $109,000 | above $174,000 up to $218,000 | not applicable | $12.20 + your plan premium |
| above $109,000 up to $136,000 | above $218,000 up to $272,000 | not applicable | $31.50 + your plan premium |
| above $136,000 up to $163,000 | above $272,000 up to $326,000 | not applicable | $50.70 + your plan premium |
| above $163,000 and less than $500,000 | above $326,000 and less than $750,000 | above $87,000 and less than $413,000 | $70.00 + your plan premium |
| $500,000 or above | $750,000 and above | $413,000 and above | $76.40 + your plan premium |
If you find yourself in a higher income bracket because your earlier tax returns showed higher income than you now have after retirement, you can appeal your IRMAA. Visit the Social Security website and find the form SSA-44 called Medicare Income-Related Monthly Adjustment Amount – Life-Changing Event.
If you have to pay a Part D Penalty
Next, learn more about these:
Medicare Supplements (Medigap)
Medicare Prescription Drug Coverage