2021 Medicare Costs *Increases* at a Glance

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Medicare costs for 2021 have been released and Medicare beneficiaries are not too happy about it. Here is what you should expect your Medicare bills to look like this upcoming year. 

Costs that apply to ALL Medicare beneficiaries

These are costs that everyone who has Medicare for healthcare coverage must pay. 

Part B premium

All Medicare beneficiaries are responsible for Part B, medical insurance, premiums. Enrollment is a requirement for getting a Medicare Advantage plan or Medigap policy. Beneficiaries also need Part B if they have retiree or COBRA coverage after age 65. 

The 2021 Part B premium will be $148.50, an increase of $3.90 a month. Note: If you’re receiving Social Security benefits, the premium will come out of your benefit. 

Part D deductible

The deductible for Part D (prescription drug) coverage is the amount one must pay for prescription drugs before the plan pays anything. This year’s Part D deductible will be $445, which is an increase of $10 from the previous year. 

Note: Your plan may charge no deductible or charge up to $445. The threshold for entering and leaving the “Donut Hole” also changed and can have an impact on how much you spend.   

Income-related Monthly Adjustment Amount

Income-related Monthly Adjustment Amount (IRMAA) are premium charges based on a Medicare beneficiary’s household income. For example, Medicare beneficiaries with high incomes pay more in premiums for Part B and Part D.

In 2021, there will be an increase by $1,000 to $88,000 for single filers or married individuals filing a separate return, and by $2,000 to $176,000 for married individuals filing a joint return.  The additional amounts in 2021 for Part B will range from $59.40 – $356.40. Part D adjustments will range from $12.30 – $77.10. Also, the 2021 Part B adjustments ranged from $57.80 – $347, and for Part D, from $12.20 – $76.40.

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Costs that ONLY apply to Original Medicare beneficiaries

Original Medicare beneficiaries are those who have Medicare Part A and Part B alone, or with or without a supplement, retiree plan, or some other coverage that works with these two parts of Medicare. They will be responsible for these costs.

Part A costs for hospitals and skilled nursing facilities

The Part A deductible in 2021 will be $1,484, which is an increase of $1,408 from 2020. This is not an annual deductible, but instead, covers a 60-day benefit period. Extended days of hospitalization will be an additional charge of $371 a day for days 61 – 90 and $742 for days 91- 150. 

Note: Medicare covers the complete cost for the first 20 days of medically necessary care in a skilled nursing facility (SNF), after a three-day inpatient hospital admission; beneficiaries do not have a copayment. However, for days 21 – 100, the copayment will be $185.50 in 2021, an increase of $9.50.

Part B deductible

The Part B deductible is the amount that beneficiaries pay for outpatient services, such as doctor visits, therapy, day surgery, or radiation treatments before Part B is effective. In 2021, the Part B deductible will be $203, an increase of $4 from last year. 

Note: This does not apply to those who have Medicare Advantage, as these plans can have their own deductibles.

Medicare Advantage costs

The most substantial change in 2021 will be the increase in the maximum out-of-pocket limit. After a beneficiary writes this amount in checks, the plan covers all costs for the remainder of the year. 

In 2020 the limit for in-network services has been $6,700 and in- and out-of-network combined was $10,000. The 2021 limits will be $7,550 and $11,300. Note: Medicare Advantage plans set their costs following established criteria. 

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