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2020 Medicare Parts A & B Premiums and Deductibles

On November 8, 2019, the Centers for Medicare & Medicaid Services (CMS) released the 2020 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs.

Medicare Part B Premiums/Deductibles

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.

Each year the Medicare premiums, deductibles, and copayment rates are adjusted according to the Social Security Act. For 2020, the Medicare Part B monthly premiums and the annual deductible are higher than the 2019 amounts. The standard monthly premium for Medicare Part B enrollees will be $144.60 for 2020, an increase of $9.10 from $135.50 in 2019. The annual deductible for all Medicare Part B beneficiaries is $198 in 2020, an increase of $13 from the annual deductible of $185 in 2019.

The increase in the Part B premiums and deductible is 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.

From day one, President Trump has made it a top priority to lower drug prices. Currently, for Part B, the law requires CMS to pay the average sales price for a drug and also pays physicians a percentage of a drug’s sale price. This incentivizes drug companies to set prices higher and for physicians to prescribe more expensive drugs – because that leads to a higher Medicare payment. Through the President’s drug pricing blueprint, the Trump Administration is working to lower drug prices in Medicare Part B drugs.

CMS is committed to empowering beneficiaries with the information they need to make informed decisions about their Medicare coverage options, including providing new tools to help them make those decisions through the eMedicare initiative. In addition to the recently released premiums and cost sharing information for 2020 Medicare Advantage and Part D plans, we are releasing the premiums and cost sharing information for Fee-for-Service Medicare, so beneficiaries understand their options for receiving Medicare benefits. As previously announced, as a result of CMS actions to drive competition, on average for 2020, Medicare Advantage premiums are expected to decline by 23 percent from 2018, and will be the lowest in the last thirteen years while plan choices, benefits and enrollment continue to increase. Premiums and deductibles for Medicare Advantage and Medicare Part D Prescription Drug plans are already finalized and are unaffected by this announcement.

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 Part A Premiums/Deductibles

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.

The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,408 in 2020, an increase of $44 from $1,364 in 2019. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2020, beneficiaries must pay a coinsurance amount of $352 per day for the 61st through 90th day of a hospitalization ($341 in 2019) in a benefit period and $704 per day for lifetime reserve days ($682 in 2019). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $176.00 in 2020 ($170.50 in 2019).

Part A Deductible and Coinsurance Amounts for Calendar Years 2019 and 2020 by Type of Cost Sharing
2019 2020
Inpatient hospital deductible $1,364 $1,408
Daily coinsurance for 61st-90th Day $341 $352
Daily coinsurance for lifetime reserve days $682 $704
Skilled Nursing Facility coinsurance $170.50 $176

Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to voluntarily enroll in Medicare Part A. Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $252 in 2020, a $12 increase from 2019. Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $458 a month in 2020, a $21 increase from 2019.

For more information on the 2020 Medicare Parts A and B premiums and deductibles (CMS-8071-N, CMS-8072-N, CMS-8073-N), please visit:

CMS-8071-N: https://www.federalregister.gov/documents/2019/11/13/2019-24441/medicare-program-cy-2020-inpatient-hospital-deductible-and-hospital-and-extended-care-services

CMS-8072-N: https://www.federalregister.gov/documents/2019/11/13/2019-24439/medicare-program-cy-2020-part-a-premiums-for-the-uninsured-aged-and-for-certain-disabled-individuals

CMS-8073-N: https://www.federalregister.gov/documents/2019/11/13/2019-24440/medicare-program-medicare-part-b-monthly-actuarial-rates-premium-rates-and-annual-deductible

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Rates for Individual Health Insurance Plans via ACA May Drop for 2020

Maine’s three providers of individual health insurance on the Affordable Care Act marketplace have revised their rate requests for 2020, significantly lowering their projected rates.

This is good news for anyone who plans to enroll or to renew their coverage in health insurance via the Affordable Care Act for 2020. Reminder: Open Enrollment for 2020 health plans starts Nov. 1 and ends Dec. 15.

Click here to read more from the Lewiston Sun Journal.

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MOFGA Receives Grant from Harvard Pilgrim Health Care and Allen Insurance and Financial

The Maine Organic Farmers and Gardeners Association (MOFGA) recently received a $5,000 grant from Harvard Pilgrim Health Care Foundation and Allen Insurance and Financial to increase access to and affordability of healthy, nutritious food for low income families. MOGFA has a longstanding commitment to help all Maine people acquire local, organic foods regardless of geography or income. Pictured in the photo, left to right, are: Bill Whitmore, Maine Market Vice President, Harvard Pilgrim Health Care; Sarah Alexander, Executive Director, Maine Organic Farmers and Gardeners Association; and Dan Wyman, JD, Insured Benefits Manager, Allen Insurance and Financial.Harvard Pilgrim Health Care and Allen Insurance and Financial donation to MOFGA

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Some Best Practices for Health Insurance Enrollment

Health insurance is a valuable benefit offered by businesses to their employees. You’re glad it’s there, but let’s be realistic – when it comes to the paperwork involved, we know many people would rather be doing something else. Here are some best practices to streamline your business’s health insurance enrollment.
1. Plan ahead by creating a realistic schedule for open enrollment by beginning with the end in mind.
Ideally, your open enrollment period should end no later than 30 days prior to the end of your plan year or renewal date. This kind of timely action builds in a buffer for delay or error in the process.
Once you determine the ending date of open enrollment, back up from there to schedule open enrollment meetings, print forms or materials, distribute or mail open enrollment packets, etc. We’re here to help.
2. Collect all required information for each plan participant (employee or dependent).
This may include:

  • Last Name, First Name and Middle Initial (exactly as provided in previous enrollments)
  • Social Security Number (unique and accurate identifying information for each dependent)
  • Address
  • Date of Birth (unique and accurate identifying information for each dependent)
  • Gender
  • Hire Date (if an employee)
  • Coverage Effective Date
  • Product Coverage (Medical, Dental, Flex)
  • Date of Termination, if applicable, and Reason for Term (especially needed for COBRA)
  • E-mail address

3. Double-check all data. Accurate completion of all fields on any enrollment or waiver forms now saves time, delay and aggravation later. Insurance companies can use only the information they are given.
4. Educate employees about the guidelines of spending accounts associated with their health coverage. For example, FSAs are “use it or lose it” accounts, where contributions made to an FSA during a calendar year can be used only for eligible expenses incurred during the same year – unless your plan provides for either a grace period or a carryover.
And – if your employees have flex debit cards, remind them to save all receipts for purchases made with the card as well as the cards themselves, even if the allocated FSA total amount has already been used.
Additionally, discussing these items with your agent can help with the decision-making process: Your budget for health insurance and contribution strategy (for the business and for the individual employee) and the health insurance networks the insured employees use or prefer to use.

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Anna Moorman Recognized for Medicare Sales Production

Anna Moorman

Anna Moorman

Anna Moorman of Allen Insurance and Financial has been recognized as a top Medicare producer in Maine. Moorman is one of two agents at the company who specialize in the complex market of Medicare insurance, working with a number of insurance carries to give customers a range of choices to suit their needs.
Moorman and her colleague Jo-Ann Neal are based in the company’s Chestnut Street offices in Camden.
“Medicare is very complex and both Anna and Jo-Ann enjoy helping clients navigate the Medicare maze by simplifying the process,” said Michael Pierce, company president. “At Allen Insurance and Financial, our goal is to provide dedicated, one-on-one attention to our Medicare customers, assessing each person’s needs and finding options that will align with their budget and healthcare goals.”
Among the insurance companies represented by Allen Insurance and Financial for the Medicare market: Anthem Blue Cross and Blue Shield of Maine, AARP (via United Healthcare), Martin’s Point, Humana, Mutual of Omaha, Silverscript and Harvard Pilgrim Health Care.
At a recent luncheon in Bangor, Anthem recognized Moorman for her work in the Medicare market, where she received an award for being the second highest performing broker for Anthem Medicare Supplement sales in 2017 for the State of Maine. She also received a second award for overall production of Anthem Medicare policies written in 2017, coming in fourth in a field of more than 200 brokers.

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Meet Our Medicare Team at the MidCoast Senior Expo

Join Jo-Ann Neal and Anna Moorman at the MidCoast Senior Expo, Friday, May 18 from 9 a.m. to 2 p.m. at the Elk’s Lodge, 210 Rankin Street in Rockland.
Jo-Ann and Anna  will be ready to answer questions about Medicare.  The event is expected to draw 32 exhibitors and is sponsored by Maine Senior Guide.
 

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Considering Self-Funding in the Battle Against Increasing Health Insurance Costs

By Sherree L. Craig, CEBS, Insured Benefits Division

Sherree Craig

Sherree L. Craig, CEBS


With a predicted medical trend increase of 6.5% in 2018 (PwC), businesses can expect to see a bump in their health insurance costs again this year.
Until the underlying issue of the cost of medical care can be controlled, company health insurance plans will be impacted with higher premium costs, reduced insurance protection and increased employee dissatisfaction with their benefits.
More businesses are exploring the opportunity to be creative with their company health plan offerings through a risk-mechanism called self-funding. What are they doing? They are paying for all of their employees’ health care with the assistance of a third party administrator (TPA), insuring only their highest cost claims with a stop-loss insurance policy. This way, they have several advantages over a fully insured health plan.
1. Removal of insurance company overhead costs
2. Reduced state premium taxes
3. Improved cash flow and,
4. Flexibility in plan designs and service offered.
This flexibility leads us into several strategic initiatives considered next generation for health plan cost control, and employers are adopting these innovative ideas to help reign in their medical spending.
All health plans are required to pay 100% for preventive services. How about removing all financial obstacles (co-payments and deductibles) for the treatment of the chronic conditions that lead to the largest medical costs down the line? With this concept, Value Based Plan Design” diabetics are getting proper testing and medications to prevent the catastrophic claim that is imminent without proper care.
Another tool being adopted by self-funded health plans is the reference-based pricing model. A reference price (the most that will be paid) is determined for a treatment, either by a percentage of the allowable Medicare payment (i.e., what the federal government has to pay for that service) or by a study of comparable pricing from well-respected providers (Centers of Excellence).
The plan payment for any provider is capped at that reference price. A health plan might also choose to negotiate with that provider to accept that price (Direct Provider Contracting), or the health plan policy might be to have the member pay the balance bill if higher than the reference price.
Self-funding is not an answer for all employers. If you do choose to make that leap, or want to explore the opportunities, be sure to speak with an experienced professional. There is a lot of work to be done when moving in this direction and thorough education, preparation, and analysis is critical.
Sherree Craig is certified in self-funding by the National Association of Health Underwriters.The NAHU Advanced Self-Funding Certification ensures knowledge of regulatory concerns, service model options, cost-containment strategies and underwriting concepts necessary for providing advice and direction on employer self-funded health plans.