The Medicare Board of Trustees (MBT) released its latest report yesterday and within the report there seems to be plenty of good news, at least at first blush when it comes to expected health coverage premiums in retirement.
Please keep in mind that within the MBT report these projections for premiums are just “estimates” as the actual premiums will be determined by the Centers of Medicare/Medicaid Services (CMS) and will be released later this year.
Within the report the MBT is projecting that both Medicare Part A and Part B as well as the National Base Premium for Part D, which is used to determine any surcharges and late fees a person may have for prescription drug coverage will remain constant for the next two years (2018 and 2019).
The projected future premiums for these types of coverage through 2026 from 2017 are expected to increase by 3.94 percent for the Medicare Part A premium, 3.046 percent for the Part A deductible, 3.97 percent for the Part B premium, 4.24 percent for the Part B deductible, 4.7 percent for the National Base premium (Part D) and 4.8 percent for the Part D deductible.
For high income earners or those affected by Medicare’s Income Related Monthly Adjustment Amount (IRMAA) the MBT is reporting that the brackets will be lowered which will result “in a greater number of beneficiaries paying the higher amounts. In addition, beginning in 2020, the legislation adjusted the methodology used to index the thresholds, and accordingly more beneficiaries will be subject to the income-related premiums”.
Again, this is at first blush as it should be noted that the MBT former projections through the years have been slightly off in the past as CMS released actual premiums and deductibles of varying amounts after each report was released, but we should be treating this as good news as it would appear that premiums may not increase as high as originally thought.
These projections are just that and they should not be used in planning for any future costs as the actual Medicare premiums and deductibles will, again, be released by CMS later in the year.