What You Should Know About Medicare Changes in 2021
- Learn how Medicare changes in 2021 are affecting premiums, deductibles and covered services for Original Medicare, Medicare Advantage and Part D drug plans.
Medicare is a federal government program that makes health care costs more affordable. The Centers for Medicare and Medicaid Services adjusts its guidelines from time to time due to factors such as inflation and evolving health care needs. Here's a quick overview of key Medicare changes in 2021 that may affect your health coverage.
Changes in Premiums and Deductibles
How Much Are Part A Premiums in 2021?
What's new: Beneficiaries with fewer than 40 quarters of Medicare-covered employment are paying higher Part A premiums for hospital insurance in 2021. These premiums are based on contributions to Medicare while working.
- Individuals with 40 quarters or more of employment typically don't pay a premium. About 99% of beneficiaries have premium-free Part A coverage.
- Individuals (and their spouses) who have between 30 and 39 quarters of coverage can expect to pay Part A premiums of $259 per month in 2021, $7 more than in 2020
- Individuals with less than 30 quarters of coverage can expect to pay the full Part A premium of $471 per month in 2021, $13 more than in 2020
How Much Are Part A Deductibles and Coinsurance in 2021?
What's new: Part A deductibles and coinsurance for hospital stays and skilled nursing facility care are increasing in 2021.
When you're admitted to the hospital, you pay a deductible to cover the costs of the first 60 days of Medicare-covered care. In 2021, this deductible is set at $1,484 , which is $76 more than in 2020.
After 60 days in the hospital, the following coinsurance applies:
- Days 61 to 90: $371 per day, an increase of $19 from 2020
- After 90 days: $742 per day for each lifetime reserve day, an increase of $38 from 2020. You have a total of 60 reserve days for your lifetime.
In 2021, the skilled nursing coinsurance applies after 20 days:
- Days 21 to 100: $185.50, an increase of $9.50 from 2020
What Are the Part B Income Limits and Premiums?
What's new: Part B premiums for medical insurance are based on income. Medicare changes in 2021 include increases to both income thresholds and monthly premiums.
The standard monthly Part B premium in 2021 is $148.50, an increase of $3.90 from 2020. This premium applies to those filing income tax returns of:
- $88,000 or less, for those filing an individual tax return or are married and filing a separate tax return. This is an increase of $1,000 from 2020.
- $176,000 or less for those filing a joint tax return. This is an increase of $2,000 from 2020.
A list of premiums for those with higher income is available on the Medicare website.
What Is the Part B Deductible in 2021?
What's new: In 2021, the annual Part B deductible is $203, an increase of $5 from 2020.
Once you've met the deductible, you typically pay 20% of the Medicare-approved cost of the service, including physician visits, outpatient therapy and durable medical equipment.
Other Medicare Changes in 2021
End-Stage Renal Disease
What's new: Previously, individuals with end-stage renal disease (ESRD) could only receive coverage through Original Medicare. Medicare changes in 2021 now give those with ESRD the option of joining a Medicare Advantage plan.
When choosing a Medicare Advantage plan, keep in mind that private insurance companies may limit the health care providers you can see. You may want to confirm your physician, transplant specialist, dialysis facility and other providers are part of a plan's network before you join.
Part D Coverage Gap
What's new: In 2021, the threshold for the Part D drug coverage gap has increased. The gap now begins when you reach $4,130 in drug spending in a benefit period, up $110 from 2020.
Once you reach this amount, your drug coverage can be limited. You typically have to pay 25% of the cost of your prescriptions until you reach the catastrophic coverage threshold. This threshold is set at $6,550 for 2021, an increase of $200 from 2020.
Lower Costs for Insulin
What's new: Medicare has introduced a new insulin savings model giving some beneficiaries a predictable supply of affordable insulin.
Some drug plans are participating in the voluntary Part D Senior Savings Model to reduce out-of-pocket costs for insulin. These plans make various types of insulin available, with a 30-day supply capped at a copayment of $35. This can save you up to $446 per year.
Acupuncture for Chronic Low Back Pain
What's new: Medicare Part B coverage now covers acupuncture visits for beneficiaries with chronic low back pain.
Chronic low back pain is defined as lasting 12 weeks or longer with no known cause. Covered acupuncture services must be performed by providers who are accredited and fully licensed to perform acupuncture. Medicare covers:
- Up to 12 acupuncture visits in 90 days
- Another 8 sessions if your condition is improving
- A maximum of 20 acupuncture treatments per year
What's new: Medicare expanded access to telehealth benefits in 2020 due to COVID-19, giving beneficiaries an alternative to in-person visits with health care providers.
Services that are normally offered in-person such as consultations and psychotherapy may now be provided through technology such as two-way audio and video. You can check in with your doctor virtually, send photos and videos for remote assessments and conduct e-visits through an online patient portal.