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It’s a new year, and with that comes key changes to Medicare benefits, costs, and availability. Medicare premiums, deductibles, and coinsurance costs are adjusted annually, and existing or prospective enrollees need to understand these changes to make informed decisions when shopping for plans.
Read on to learn about 2021 Medicare changes that might affect your health care coverage. These include price increases in Original Medicare , decreased costs and expanded availability for Medicare Advantage plans, cost adjustments to Medicare Supplement plans, and additional benefits for beneficiaries that need extra care during the COVID-19 pandemic .
Original Medicare (Part A and Part B) premiums and deductibles are increasing in 2021.
Beneficiaries that don’t qualify for a free Medicare Part A premium will pay $259 or $471 per month in 2021, depending on their employment history. This premium increased from $252 and $458 in 2020.
The Medicare Part A hospital deductible is now $1,484, a $76 price jump since 2020.
The Medicare Part B premium is $148.50 per month in 2021, an increase of $3.90 since 2020. The Part B deductible also increased by $5 to $203 in 2021.
Medicare Advantage premiums are expected to drop by 11% this year, while beneficiaries now have access to more plan choices than in previous years.
Deductible prices and out-of-pocket limits for some Medicare Supplement or Medigap plans have been adjusted this year.
Medicare Part D prescription drug premiums increased slightly from 2020. Beneficiaries now have access to plans that cover insulin for a $35 copay.
Medicare will cover COVID-19 testing, inpatient hospitalizations, vaccine administration, and other associated costs.
Original Medicare changes in 2021
The Centers for Medicare and Medicaid Services, or CMS, announced in November that it is increasing premium and deductible costs in the Original Medicare program. Here’s a snapshot:
Medicare Part A premium
The premium for Medicare Part A (hospital insurance) is free for beneficiaries who have paid into Medicare through working at least 40 quarters of eligible employment. This population includes around 99% of beneficiaries. However, people aged 65 and older who have less than 40 quarters of qualified work history on record and people with certain disabilities will need to pay a monthly premium as follows in 2021:
People with at least 30 quarters of coverage will pay $259 per month , up from $252 in 2020.
People with less than 30 quarters of coverage or some individuals with disabilities will pay $471 per month this year, up from $458 in 2020.
Medicare Part B premium
Most Original Medicare beneficiaries pay a standard monthly premium rate for their Medicare Part B (medical insurance) benefits. This baseline applies to taxpayers with an annual income of $88,000 or less or joint-filing couples earning $176,000 or less. For this population, the standard Medicare Part B premium is $148.50 per month in 2021, up from $144.60 in 2020. Higher-earning beneficiaries pay more based on their income tax bracket.
Part A deductible and coinsurance