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March 11, 2021, 2:37 p.m. EST

Medicare changes 2021: What you need to know

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by Home Media

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In 2021, Medicare Part A beneficiaries will pay an inpatient hospital deductible of $1,484 when they’re admitted to the hospital, up from $1,408 last year. This amount covers the first 60 days of a Medicare-covered inpatient hospital stay, after which a patient will pay a daily coinsurance of $371 per day for days 61 to 90 and $742 per day for lifetime reserve days . Beneficiaries in skilled nursing facilities will pay $185.50 per day in coinsurance for days 21 to 100 .

Part B deductible and coinsurance

This year, the annual Medicare Part B medical insurance deductible increased from $198 in 2020 to $203 in 2021. After meeting your deductible, you’ll pay 20% coinsurance for the Medicare-approved cost of most doctor services, outpatient therapy, and durable medical equipment.

Medicare Advantage changes 2021

The cost of Medicare Advantage premiums and deductibles vary based on the plan a beneficiary chooses and the zip code in which they live. Overall, CMS expects that the average premium cost for 2021 Medicare Advantage plans will decline by 11% to $21, down from $23.63 on average in 2020 . MA plan cost reductions have been a trend for the past few years, now down 34.2% from 2017. Some states may see average premiums decline by 50% or higher.

In addition to affordability, the availability of Medicare Advantage plans expanded nationwide this year. There are now 2,100 more MA plans in operation than in 2017, bringing the total amount of plans to 4,800 in 2021. On a municipal level, 47 plans per county are available in 2021, up from 39 in 2020. Rural counties now offer 2,900 MA plans in 2021, up from 2,450 in 2020.

According to the Kaiser Family Foundation , the average Medicare beneficiary has access to 33 Medicare Advantage plans in 2021, a historically high amount compared to the last 10 years. Twenty-seven of those MA plans include prescription drug coverage (also known as MA-PD plans).

MA enrollment is also expected to reach all-time high levels this year. CMS estimates that around 26.9 million people will enroll in Medicare Advantage plans this year, up from about 24 million in 2020. 

Additionally, starting in 2021, beneficiaries with End-Stage Renal Disease can now enroll in a MA plan over traditional Original Medicare. 

Medicare Part D

This year, average Medicare Part D prescription drug premiums increased slightly from an all-time low of $30 in 2020 to $30.50 in 2021 .

Starting this year, beneficiaries who use insulin can choose from over 1,600 Medicare Advantage and Medicare Part D prescription drug plans that offer insulin coverage for a copay of $35 for a month-long supply , saving them $446 in out-of-pocket costs on average each year.

Yearly Medicare Part D prescription drug plan deductibles vary by plan and provider, and some policies don’t charge a deductible at all. Still, no drug plan can charge more than $445 in 2021, up from $435 last year.

2021 Medicare Supplement changes

Medicare Supplement or Medigap monthly premiums vary depending on the plan you choose.

Most Medigap policies typically don’t have their own deductible. However, Plan F, Plan G, and Plan J (all high-deductible options) are sold with a $2,370 annual deductible , meaning you’ll need to reach this amount in out-of-pocket expenses before your plan kicks in to cover costs.

In 2021, Plan K and Plan L have out-of-pocket limits of $6,220 and $3,110 , respectively. After you meet this threshold, your plan will cover 100% of the costs for the rest of the benefit period.

Changes to Medicare in the COVID-19 pandemic

The coronavirus pandemic brought significant changes to the Medicare program. Critically, CMS announced in October that Medicare would cover 100% of the cost of COVID-19 vaccines approved by the Food and Drug Administration. You will not need to pay a deductible or coinsurance for vaccine administration. Medicare Part B, Medicare Part D, and Medicare Advantage plans all cover vaccines at no additional cost.

Medicare also covers the following:

  • Lab testing (including antibody testing)

  • Monoclonal antibody treatments for COVID-19

  • Medically necessary inpatient hospitalizations (hospital deductibles, copays, and coinsurances may apply)

  • Telehealth services

Since Medicare Advantage plans cover the same benefits offered by Original Medicare, MA members will have access to these COVID-related benefits. Some MA plans also cover meal delivery and medical transport.

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