On November 6th, The Centers for Medicare & Medicaid Services (CMS) announced the 2021 monthly Medicare Parts A and B premiums, deductibles, and coinsurance amounts.
Medicare Part B Premiums/Deductibles
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.
The standard monthly premium for Medicare Part B enrollees will increase from $144.60 in 2020 to $148.50 in 2021, an increase of $3.90 per month. Recent legislation signed by President Donald Trump significantly dampens the 2021 Medicare Part B premium increase that would have occurred given the estimated growth in Medicare spending next year. According to CMS, 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.
CMS also announced that the annual deductible for Medicare Part B enrollees will increase from $198 in 2020 to $203 in 2021, an increase of $5. The additional $5 in 2021 will be borne by enrollees as an out-of-pocket expense under all Medicare Supplement Insurance plans (also known as 'Medigap') available to newly eligible Medicare beneficiaries.
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. Medigap plans automatically adjust benefits in 2021 so that the higher inpatient deductible is covered.
Medicare Annual Election Period (10/15 - 12/7)
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 Annual Election Period, which began on October 15th and ends on December 7th, 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. Over the past three years, CMS has redesigned its useful Medicare Plan Finder so that Medicare beneficiaries may:
- Compare pricing between Original Medicare, Medicare Advantage plans, Medicare prescription drug plans (Medicare Part D), and Medigap policies;
- Compare coverage options on their smartphones and tablets;
- Compare up to three Medicare Part D drug plans or three Medicare Advantage plans side-by-side;
- Get plan costs and benefits, including which Medicare Advantage plans offer extra benefits;
- Build a personal drug list and find Medicare Part D prescription drug coverage that best meets their needs.
Highlights for 2021 Open Enrollment include:
- A 34 percent decrease in average monthly premiums for Medicare Advantage plans since 2017.
- More than 4,800 Medicare Advantage plans are offered for 2021, nearly double the offerings 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.
