Considering the Social Security Administration’s 2019 cost-of-living adjustment, what can your clients expect to pay for Medicare Part A and Part B premiums and deductibles in 2019?

Every year, the Social Security Administration (SSA) decides if there will be a cost-of-living adjustment (COLA) to counteract inflation. Based on that, Centers for Medicare & Medicaid Services (CMS) may increase Medicare beneficiaries’ premiums and deductibles to cover costs.

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How Much Will Medicare Cost in 2019?

Part B

On October 12, CMS announced it will raise the monthly Medicare Part B premiums from $134 in 2018 to $135.50 in 2019. It will also tack on an additional $2 to the annual Part B deductible, making it $185 in 2019.

Part A

As for the Part A premium, CMS will raise it from $422 per month to $437 per month next year. (Note: Most Medicare beneficiaries are exempt from paying the Medicare Part A premium since they or their spouse paid into Medicare while working.) The 2019 Part A deductible is $1,364 — $24 more than in 2018. Part A coinsurance amounts will also increase in 2019 as shown in this table.

2019 Part A Deductible & Coinsurance Amounts

Type of Cost Sharing 2018 2019
Inpatient Hospital Deductible $1,340 $1,364
Daily Coinsurance for Days 61 to 90 $335 $341
Daily Coinsurance for Lifetime Reserve Days $670 $682
Skilled Nursing Facility Coinsurance $167.50 $170.50

The 2019 Cost-of-Living Adjustment

A day before CMS’ announcement about 2019 Medicare costs, the SSA announced their plans to raise the COLA 2.8 percent in 2019. As a result, retired workers collecting Social Security can expect to see their checks rise by an average of about $39 per month next year. Retired couples will receive an average of about $67 in additional Social Security benefits in 2019.

This year’s COLA is the largest since 2011, which saw a 3.6 percent increase.

COLA Increases Over Time

The SSA also announced workers will see the maximum amount of earnings subject to Social Security tax increase to $132,900 next year — up 3.5 percent from 2018.

How Your Clients Will Be Affected

Due to Medicare Part A cost-sharing and Part B premium increases being relatively small, many of your Medicare clients should be able to enjoy bigger Social Security checks with the 2019 COLA. According to CMS, 99 percent of Medicare beneficiaries have premium-free Part A, which means the $15 increase won’t affect most enrollees. For beneficiaries who pay the full cost of their Medicare Part A premium and the highest-income Medicare Part B enrollees, the COLA may not be greater than the increase in their premiums.

If you have clients who are considered “held harmless,” they will pay less than the standard Part B premium. (The “Hold Harmless Provision” states that certain beneficiaries’ Part B premium increases cannot exceed the increase in their Social Security benefits.) Clients who have higher incomes will be facing another round of high income-related surcharges for their Part B premiums.

Here’s how your clients’ annual incomes will affect their Medicare Part B monthly premiums for 2019.

File Individual Tax Return File Joint Tax Return Monthly Adjustment 2019 Part B Monthly Premium
$85,000 or Less $170,000 or Less $0.00 $135.50
$85,001 to $107,000 $170,001 to $214,000 $54.10 $189.60
$107,001 to $133,500 $214,001 to $267,000 $135.40 $270.90
$133,500 to $160,000 $267,001 to $320,000 $216.70 $352.20
$160,001 to $500,000 $320,001 to $750,000 $297.90 $433.40
$500,001 or More $750,001 or More $325.00 $460.50
File Separate Tax Return from Spouse Monthly Adjustment 2019 Part B Monthly Premium
$85,000 or Less $0.00 $135.50
$85,001 to $415,000 $297.90 $433.40
$415,001 or More $325.00 $460.50

Note: New for 2019, there is a new higher-tier income bracket for those filing tax returns individually, as well as for those filing tax returns jointly. Individuals earning more than $500,000 and couples earning more than $750,000 will pay the highest 2019 Part B monthly premiums.

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Around 38 million Medicare enrollees are enrolled in Medicare Part A, Part B, or both programs. Be sure you can answer your clients’ questions around these cost increases or help them reassess their coverage if needed.

Editor’s Note: Table information is from CMS’ 2019 Medicare Parts A & Premiums and Deductibles Fact Sheet.