Medicare Changes for 2021February 9th, 2021
Medicare rules and benefits can be confusing. Here’s a guide to show what’s new for 2021. If you haven’t signed up for Medicare yet, this information can help you understand your choices.
Part A (hospital insurance) is half of what is often called Original Medicare. It covers hospitalization, other institutional care, and home health services. Most people don’t pay for Part A because of their work histories. For those who buy Part A, the premium is $471 each month. People who paid Medicare taxes for at least 7.5 years can buy Part A at a discounted premium of $259 per month.
Part A costs generally increase each year. The deductible is $1,484 for each hospitalization with no copay for the first 60 days of hospitalization and $371 per day for days 61–90 of hospitalization. Beyond 91 days, your cost is $742 per “lifetime reserve day” day for the next 60 days.
Part B (medical insurance) is the second half of Original Medicare. It covers diagnostic, preventative and mental health care, as well as office visits, ambulance service, and durable medical equipment.
The standard Part B premium for individuals with incomes $88,000 or less is $148.50 per month. Individuals with incomes higher than $88,000 and couples with incomes higher than $176,000 annually will pay a premium surcharge. Those premiums range between $207.90 to $504.90 per month, depending on income levels.
The Part B deductible increased to $203 per year. After you meet your deductible, you will pay about 20% of the Medicare-approved amount for doctor services, outpatient therapy, and durable medical equipment (DME).
Some people opt for Part C coverage, sometimes called Medicare Advantage (MA), instead of Parts A and B. Depending on your plan, Part C might also replace Part D (prescription coverage). Part C plans cover what Parts A and B cover and often offer vision, dental, and hearing coverage. This is still Medicare but is administered by private companies approved by Medicare.
Many Medicare Advantage Plans don't charge a premium, but the average premium of those that do is $21/month in 2021.
Part D is prescription drug coverage. If you have Original Medicare (Parts A and B), you can opt for prescription coverage through Part D. Higher income individuals and couples will pay premium surcharges between $12.30 and $76.40 each in addition to the base premium. Drug coverage is often included in Part C plans. If your Part C covers prescriptions, DO NOT enroll in a Part D plan without checking with your current insurer because doing so could lead to you being dropped from your Part C plan.
Before you enroll in a Part D program, check to see whether you have prescription coverage from another source, such as veterans’ benefits or benefits from a former employer. Costs will vary depending on factors such as your medications, the pharmacies you use and whether you qualify for extra help. Check which available plan is best for you.