Last year was one for the books. With the coronavirus pandemic, Medicare saw many changes, some of which carried over into 2021. Changes such as premiums and deductible increases are pretty typical for Medicare due to inflation. However, in 2021, the increases weren’t as high as initially anticipated. You can expect to see some new programs under Medicare in 2021 as well.
Medicare costs
As you may know, Medicare does not come without a price tag. Even Medicare Part A, which is premium-free for most people, is paid for one way or another. In addition to monthly premiums, Medicare also has deductibles, coinsurance, and copays.
Medicare Part A in 2021
Medicare Part A covers your inpatient medical care. As mentioned above, you will likely qualify for premium-free Part A. To be eligible for a $0 monthly Part A premium at 65, you or your spouse will need to have at least 40 quarters of work while paying FICA taxes.
Part A does, however, have a deductible. The Part A deductible is per benefit period, which means if you have more than one hospital stay in two different benefits periods in 2021, you may pay the Part A deductible more than once this year. The 2021 Part A deductible is $1,484, an increase of $76 from 2020.
Medicare Part B in 2021
Medicare Part B covers your outpatient medical care. Unless you qualify for Medicaid, you’ll have a monthly Part B premium. In 2021, the standard Part B premium is $148.50, an increase of only $3.90. The Part B premium was expected to increase by much more, but the increases were limited because of the pandemic.
The Part B deductible is unlike the Part A deductible because you only pay it once per year. In 2021, the Part B deductible is $203. Once you’ve met your Part B deductible, your Part B-approved services are covered at 80% for the remainder of the year.
Medicare Part C in 2021
Medicare Part C is more commonly referred to as Medicare Advantage. This type of Medicare plan is one you can purchase through private insurance carriers, so your Medicare coverage is provided by a carrier rather than the government. In 2021, there are over 3,500 Medicare Advantage plans, according to the Kaiser Family Foundation (KFF). However, you’ll likely only have about 30 plan options in your zip code.
Costs such as premiums, deductibles, and copays vary by plan. However, the out-of-pocket maximum for Medicare Advantage plans can’t exceed $7,550 in 2021. This limit includes the money you spend on approved inpatient and outpatient services. Your premiums and Part D drug costs are not included in the maximum out-of-pocket limit.
Another change made to Medicare Advantage plans in 2021 is that there are no longer any health questions asked when applying for a Medicare Advantage plan. Before 2021, all Medicare Advantage plans asked, “Do you have end-stage renal disease?” If the answer was yes, you were denied coverage. Now everyone, including those with ESRD, can enroll in any Medicare Advantage plan sold in their area.
Medicare Part D in 2021
Medicare Part D covers your prescription drugs. This, too, is a type of Medicare plan you purchase through private insurance carriers (unless you have a Medicare Advantage plan, in which case your Part D coverage is likely built-in). Like Medicare Advantage plans, Part D costs vary by plan. However, in 2021, the national average Part D premium is $41, and the maximum allowed deductible is $445.
The Part D Senior Savings Model
A new Part D program rolled out in 2021 which gives insulin users a way to save money. As of January 1, 2021, if you’re enrolled in a Senior Savings Model Part D plan, a 30-day supply of your covered insulin will be limited to a $35 copay. However, many plans offer copays lower than the maximum allowed copay.
Coverage affected by COVID-19
The coronavirus pandemic sparked a few changes in certain Medicare-covered services. Telemedicine was covered by Medicare pre-pandemic, but only for certain individuals. However, in 2020, Medicare started covering telemedicine services for all beneficiaries. Telemedicine visits are now covered the same as in-person doctor visits. This new coverage carried over into 2021.
Medicare also began covering COVID-19 diagnostic tests in 2020 as well as antibody testing. Medicare still covers these tests at 100%, and that coverage is expected to continue. Now that COVID-19 vaccines are being administered, Medicare has also started covering these at 100% under Part B in 2021.
Medicare generally has minor changes from year to year, so it’s normal to see prices change. You should pay attention to the new programs and coverage rules scheduled to happen, and those are usually announced before the new year. These are just a few of the important Medicare changes to prepare for in 2021.