You Will Net MORE $ in 2019
Now that we know the COLA for Social Security we can compare it to the increase in Medicare Part B and D. What do we find?
You will have a NET increase in your income.
For instance, here the AARP tells us that the average Social Security benefit in 2018 was $1,422 and in 2019 it will be $1,461, which amounts to a 2.7% increase. This increase more than offsets the increase in Medicare Part B which rises by $1.50 a month.
If you have don’t have a Medigap or Medicare Advantage plan that covers the annual deductible, this will increase all of $2 to $185. And your inpatient deductible increases by $24 to $1,364 under Part A.
Not huge increases no matter how you look at it.
Oh, Medicare Part D premiums continue to DECLINE according to the CMS,
“Today, the Centers for Medicare & Medicaid Services (CMS) announced that, for the second year in a row, the average basic premium for a Medicare Part D prescription drug plan in 2019 is projected to decline. At a time when health insurance premiums are rising across-the-board, basic Part D premiums are expected to fall from $33.59 this year to $32.50 next year.”
Not that the CMS is political of course when they say…
“President Trump and Secretary Azar have made clear that prescription drug costs must come down. The actions that HHS and CMS are taking to increase competition in order to drive down costs for patients are working,” said CMS Administrator Seema Verma. “CMS will continue to strengthen the Part D program and bolster plans’ negotiating power so they can get the best deal for seniors from prescription drug manufacturers.”
Don’t get me wrong, the CMS was political under Obama too. And Bush. And Clinton, etc… Which is why you should always take the press releases from these government entities with a grain of salt. But, be it as it may, the facts are Part D premiums will GO DOWN in 2019.
My own opinion is that the CMS is inclined to get more and more beneficiaries under Medicare Advantage plans to essentially offload the risk to private insurance companies. The CMS pays insurers a fixed amount for every person they enroll and then it’s up to the insurance company to make sure they are well capitalized to assume the risk. So, the CMS knows exactly what its cost will be.
Essentially, it’s a voucher program for Medicare recipients. And this is where the battle lay in terms of future insurance. One side wants a single payer. The other side, a voucher system.
It will be interesting to see how this all shakes out over the next few years.
But for now, Medicare Part B is going up VERY slightly. Part D is going down. And your Social Security increase will net you more money.
I do want to quickly point out just another reason in why you should DELAY taking Social Security.
In the example cited above, the average SS payment is $1,422 and thus a 2.7% increase nets around $39.
However, say your Social Security benefit is $2000 because you deferred taking it. Your 2.7% increase nets you what, in real dollars?
That’s an extra tank of gas each month simply because you waited to take Social Security later.
Something to keep in mind.