Healthcare CostsMedicareRetirement

Medicare Board of Trustees Projections Through 2028

By April 27, 2019 No Comments

Medicare Board of Trustees released its annual report and the following is a breakdown of what can be expected in the future from Medicare, through at least 2028. The data is courtesy of the 2019 Medicare Board of Trustees Report.

Part A:

The Part A Deductible is expected to inflate 3.53% annually. The current 2019 Part A hospital in patient deductible is $1,364 per benefit period. In 2028 the deductible is projected to be $1,864 per benefit period.

With Medigap Supplemental Plans covering this cost, with the exception of Plan A Supplemental Policies, retirees who choose this coverage may see an increase each year in their Medicare Supplemental Plans.

Part B:

The Part B premium is projected to inflate by 5.87% from 2020 to 2028. The Part B deductible is projected to inflate by 6.09%.

Currently, the Part B premium is $134.50, and the deductible is $185.00. In 2028 the Part B premium is projected to be $226.30 a month while the deductible is expected to be $315.00.

These two coverages have been increased from last year’s projection where the Part B premium was only projected to inflate by 5.17% and the Deductible at 5.41%.

Part D:

The National Base Premium for prescription drug plans (Part D), which is what private insurance companies use as a base to set the premiums for coverage, is only expected to inflate by 4.99% from 2020 to 2028.

Prior Medicare Trustees reports forecasted the Part D National Base premium inflating by as much 6.4% year over year.

The Part D deductible is projected to increase by only 5.47% on average for the next 8 years. This is down from last year’s projection of 5.67%.

Supplemental Insurance (Medigap Plans):

Medigap plans are private insurance plans. The actuaries use the forecasts from the Medicare Board of Trustees to determine their premiums. With the deductibles for Part A inflating at 3.53% and Part B inflating at over 6%, it is not unreasonable to predict Medigap premiums will increase by 3% to 6% annually for at least the next 8 years.

Medicare Advantage Plans:

The Medicare Trustees’ Report does not address these plans as they are an alternative to Original Medicare. Premiums and out of pocket costs associated with these plans are determined by the private insurance companies that administer them.

Below is a chart of what is projected in terms of rates of inflation between 2020 and 2028.

Part A Deductible Part B Premium Part B Deductible Part D National Base Premium Part D Deductible Supplemental Policies
3.53% 5.87% 6.09% 4.99% 5.47% 3% to 6.09%

 

 Income Related Monthly Adjustment Amount (IRMAA):

The income brackets that determine how much income a retiree can have before receiving a surcharge on Medicare Part B and Part D premiums has remained constant and is projected to do so through 2028.

The Bipartisan Budget Act of 2018 calls for these brackets to remain constant until 2028 at which point, they will adjust annually based on the Consumer Price Index for Urban Consumers (CPI-U).

Please note that the forwarding looking data in Medicare Board of Trustees Report are just projections. Within any given year the Centers of Medicare/Medicaid Services (CMS) can adjust premiums, deductibles, and even the IRMAA brackets accordingly.

This report is to be used as a projection of what may come in the very near future.

Dan McGrath

Dan McGrath

Mr. McGrath is a Co-Founder of Healthcare Retirement Planner as well as Jester Financial Technologies. He is a best selling author, "What you don't know about retirement will hurt you" and is a nationally recognized speaker on how health costs impact retirement.

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