The hits keep coming.
The Centers for Medicare & Medicaid Services (CMS) announced the 2021 monthly Medicare Parts A and B premiums, deductibles, and coinsurance amounts.
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
And premiums will increase slightly.
The standard monthly premium for Medicare Part B enrollees will be $148.50 in 2021, an increase of $3.90 from $144.60 in 2020.
Certain democrats are supporting the idea of Medicare for All, a single-payer, national health insurance program free at the point of service, something premium increases are sure to inflame. The Medicare news comes as after Social Security announced a small COLA increase of 1.3% for the New Year.
Yet, according to CMS, “Recent legislation signed by President Trump significantly dampens the 2021 Medicare Part B premium increase that would have occurred given the estimated growth in Medicare spending next year.”
Medicare spending is estimated to grow due to people seeking care they may have delayed during the COVID-19 public health emergency, availability of more COVID-19 treatments, and availability of COVID-19 vaccines (for which CMS recently announced that there would be no out-of-pocket costs for seniors).
CMS also announced that the annual deductible for Medicare Part B beneficiaries is $203 in 2021, an increase of $5 from $198 in 2020.
Medicare Open Enrollment started on October 15, 2020, running through December 7, 2020. Medicare Advantage (or private Medicare health plans) and Part D prescription drug plan premiums are at “historic lows” according to the federal agency, with hundreds of Medicare Advantage and Part D plans now offering $35 monthly co-pays for insulin starting in January 2021.
“With the 2021 Medicare Part B premium information now available, I encourage everyone with Medicare to take time over the next four weeks to review their options during Medicare Open Enrollment,” CMS Administrator Seema Verma said in a statement. “Thanks to President Trump’s leadership, Medicare Part B premiums remain steady and seniors have more plans than ever to choose from, many new benefits, and historically low Medicare Advantage and Part D premiums.”
Medicare Part A Premiums/Deductibles
Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not pay a Part A premium since they have at least 40 quarters of Medicare-covered employment.
The Medicare Part A inpatient deductible that beneficiaries will pay when admitted to the hospital is $1,484 in 2021, an increase of $76 from $1,408 in 2020.
Medicare Open Enrollment
Medicare beneficiaries can choose to enroll in fee-for-service Original Medicare (Parts A and B) or can select a private Medicare Advantage plan to receive their Medicare benefits. Premiums and deductibles for Medicare Advantage and Medicare Prescription Drug plans (Medicare Part D) are already finalized and are unaffected by this announcement.
During the ongoing Medicare Open Enrollment – which began on October 15, 2020 and ends December 7, 2020, more than 60 million Medicare beneficiaries can compare coverage options like Original Medicare (Part A and Part B) and Medicare Advantage, and choose health and prescription drug plans for 2021.
Medicare health and drug plan costs and covered benefits can change from year-to-year. CMS urges Medicare beneficiaries to review their coverage choices and decide on the options that best meet their health needs. Over the past three years, CMS has made it easier for seniors to compare and enroll in Medicare coverage. The redesigned Medicare Plan Finder makes it easier for beneficiaries to:
Highlights for 2021 Open Enrollment
- A 34 percent decrease in average monthly premiums for Medicare Advantage plans since 2017. This is the lowest average monthly premium since 2007. Beneficiaries in some states, including Alabama, Nevada, Michigan, and Kentucky, will see decreases of over 50 percent in average Medicare Advantage premiums.
- More than 4,800 Medicare Advantage plans are offered for 2021, compared to about 2,700 in 2017. Similarly, more Medicare Part D plans are available, and the average basic Part D premium has dropped 12 percent since 2017.
- Medicare beneficiaries can join a prescription drug plan that will offer many types of insulin at a maximum copayment of $35 for a 30-day supply. More than 1,600 Medicare Advantage and Part D prescription drug plans are participating in the Part D Senior Savings Model for 2021. People who enroll in a participating plan could save up to an estimated $446 a year in out-of-pocket costs on insulin. CMS has added a new “Insulin Savings” filter on Medicare Plan Finder to display plans that will offer the capped out-of-pocket costs for insulin. Beneficiaries can use the Medicare Plan Finder to view plan options and look for a participating plan in their area that covers their insulin at no more than a $35 monthly copay.
- Free, personalized counseling on Medicare options is also available through the nonprofit State Health Insurance Assistance Program, or by calling 1-800-MEDICARE (1-800-633-4227). TTY users can call 1-877-486-2048.
A FACT SHEET ON 2021 MEDICARE PARTS A & B PREMIUMS AND DEDUCTIBLES CAN BE FOUND HERE
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
