Broker Check

Are You Getting The Most Out Of Your Medicare Benefits?

July 29, 2019


Each year, Medicare trustees issue annual reports that detail the previous year’s financial results and provide 75-year projections.  This year’s report was issued on April 22. 

The financial picture for Medicare is grim and it’s also complicated.  There are different financing methods for Medicare Parts A, B and D.  Predictions are difficult to make because medical costs have proven to be difficult to predict. 

Here’s a summary of what you need to know:

Part A is projected to run dry in 2026

Medicare Part A (hospital and inpatient care) is financed with payroll taxes collected from employers and employees (1.45% each on all earnings, plus an additional 0.9% paid by employees on earnings over certain thresholds).  The Hospital Insurance (HI Fund) held $2 Trillion in assets at the beginning of 2019 however it is projected to run dry in 2026.

Parts B and D premiums have increased at a concerning rate

Medicare Parts B (doctor visits and outpatient care) and Parts D (drug coverage) are financed from general revenues and monthly premiums paid by Medicare beneficiaries.  Premium increases for Parts B and D have averaged 6.6% and 6.3% respectively over the past 5 years.  GDP, a measure of economic activity, has averaged 4.1% over the same period.

Parts B and D premiums and deductibles are projected to continue rising at a concerning rate

The Trustees project that cost growth over the next five years will average 8.3% for Part B and 7.3% for Part D, significantly more than the projected annual GDP growth rate of 4.7% over the same period.  Medicare Part B premiums are $135.50 per month in 2019, but are expected to increase by 6.4% in 2020 to $144.30. 

Deductibles are also expected to increase.  The Part B deductible is expected to increase 6.5% from $185 in 2019 to $197 in 2020.  The Part D deductible is expected to increase 4.8% from $415 in 2019 to $435 in 2020.

Source:  2019 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, April 22, 2019

What should a Connecticut Medicare beneficiary do?

There is little that can be done about the projected increases in Medicare Part B and D premiums and deductibles however, Connecticut residents can still reduce their overall health care costs.

Step 1:  Know what you are paying

The first step to managing your health care costs is to understand what you are currently paying for coverage. 

Medicare Beneficiaries often forget that they even pay a Medicare Part B premium as it typically is withdrawn automatically from their Social Security checks. 

Connecticut residents also often forget what they are paying for their Medigap and Prescription Drug plans as many choose to have the premiums paid automatically by electronic funds transfer from their personal checking account.

Step 2:  Understand Connecticut’s unique Medigap protections

If you are among the over 150,000 Connecticut residents who have a Medigap Plan, familiarize yourself with the unique Medigap protections afforded to Connecticut residents including,

  • Continuous Availability – Connecticut requires insurers to offer Medigap policies throughout the year, not just during specific enrollment periods

  • Guaranteed Issue Rights – Connecticut requires insurers to offer coverage regardless of pre-existing conditions (with limited exceptions).


  • Community Rated Pricing Structure – unlike other states that base Medigap premiums on your age at time of policy issue or at your current age, Connecticut is one of just 8 states that requires insurers to charge the same Medigap premium (within the same plan) to all beneficiaries, regardless of their age. In Connecticut, an 85 year old pays the same as a 65 year old for the same Medigap Plan.

Step 3: Comparison Shop – you could save hundreds per year

Medigap plans are standardized with letters A through N.  The benefits within a lettered plan (Plan F, for example) are identical.  However, there is often a meaningful difference in Medigap plan pricing.  Doesn’t it make sense to know what other companies are charging for the exact same coverage you currently have?

Don’t allow another month to go by without comparing your current Medigap premium to the premiums charged by other companies for the same exact plan. 

As independent sales agents, members of our team have access to ALL Medigap insurance carriers in Connecticut.  Rather than contacting each carrier directly, contact us!  You’ll save time and potentially hundreds of dollars per year on your Medigap coverage.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Please consult your financial advisor regarding your specific situation.