One day after the Social Security Administration announced that monthly benefits would increase by 2.8% next year, retirees got more good news. Medicare Part B premiums, which pay for outpatient services and doctor fees, will increase by only $1.50, to $135.50 per month, in 2019.
Medicare Part B premiums are usually deducted directly from Social Security benefits. The small increase in Medicare Part B premiums, when coupled with the largest cost-of-living adjustment in Social Security benefits in seven years, means most retirees will see a sizable increase in their net Social Security benefits in 2019.
A 2.8% increase will boost the average Social Security benefit by $39 to $1,461 per month next year and increase the maximum benefit for someone who retires at full retirement age by about $73, to $2,861 per month, according to the Centers for Medicare & Medicaid Services.
CMS also announced that the annual deductible for Medicare Part B beneficiaries is $185 in 2019, an increase of $2 from $183 in 2018.
The vast majority of Medicare beneficiaries do not pay a premium for Part A, which covers inpatient hospital costs, since they have at least 40 quarters of Medicare-covered employment.
The Medicare Part A inpatient deduction that beneficiaries pay when admitted to the hospital will be $1,364 in 2019, an increase of $24 from $1,340 this year.
Most people who enroll in original Medicare also purchase supplemental Medigap insurance to cover their deductibles and co-payments. About one-third of Medicare beneficiaries enroll in Medicare Advantage plans that often offer additional benefits at lower costs.
CMS expects Medicare Advantage premiums to decrease by 6% on average in 2018 to $28 per month, down from $29.81 this year. Many Medicare Advantage members do not pay any additional amount above the monthly Medicare Part B premium. Medicare Advantage members do not need Medigap insurance.
The CMS announcement of the premiums and deductibles for Medicare Parts A and B, usually delayed until later in the year, was a surprise.
"CMS is committed to empowering beneficiaries with the information they need to make informed decisions about their health care," said CMS administrator Seema Verma.
Ahead of Medicare open enrollment, which begins Monday and ends Dec. 7, Ms. Verma said CMS is making improvements to the Medicare.gov website to help beneficiaries compare options and decide whether original Medicare or Medicare Advantage is right for them.
Among the tools released as part of the eMedicare initiative is a stand-alone, mobile out-of-pocket cost calculator that will provide information on both overall costs and prescription drugs.