Medicare benefits are ever-changing, and the nuances may be quite important to a senior who relies on the coverage. Medicare updates and changes in 2021 apply both to Medicare Advantage and Medicare Part D. Beneficiaries can change their plan during the annual fall enrollment period that runs from October 15 to December 7.

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Medicare Updates: Part B Premiums and Deductibles

In 2021, the premium for Medicare Part B is $148.50/month, an increase of less than $4/month over the standard 2020 premium. There was a more significant increase planned, but the federal government legislated a spending bill in October 2020 that included a provision to limit the Part B premium increase for 2021.

The Part B deductible for 2021 is $203, an increase from $198 in 2020 and up from $183 in 2017.

Some participants obtain a supplemental policy that covers their Part B deductible. This includes Medicaid, employer-sponsored plans, and Medigap plans C and F.

Note: Medigap plans C and F can no longer be sold to new enrollees but can be retained by those who are already enrolled.

Part A Premiums and Deductibles

Medicare Part A covers hospitalization costs. Approximately 1 percent of Medicare Part A enrollees pay premiums; everyone else qualifies for free based on work history for them or their spouse. Part A premiums increased in 2020, and in 2021 the premium for people with between 30-39 quarters of work history is $263/month, up from $252/month in 2020.

For individuals with fewer than 30 quarters of work history, the premium for Part A is expected to be $478/month in 2021, up from $458/month in 2020.

The Medicare Part A deductible applies to each benefit period rather than a calendar year. In 2020 the deductible for Part A was $1,408 and was increased to $1,484 for 2021. The deductible increase applies across the board to all members, although many of those enrolled carry supplemental coverage that covers all or part of the Part A deductible.

The Medicare Part A coinsurance for 2021 is $371 per day for the 61st through 90th day of inpatient care, increasing $19 per day from 2020. The coinsurance for lifetime reserve days is $742 per day in 2021, up from $704 per day in 2020.

Medicare Updates: Beneficiaries in High Income Brackets

Medicare beneficiaries determined to be in high-income brackets pay more for Part B and Part D.

High-income bracket thresholds begin at $88,000 for a single person and $176,000 for a married couple, and include levels up to $500,000 / $750,000. The levels are based on 2019 tax returns, but individuals can file an appeal if income has changed enough since then to affect their bracket.

For 2021, the Part B premium for high-income beneficiaries ranges from $207.90/month to $540.90/month, depending on income.

Additional Medicare FAQs

  • Approximately 24 million people had Medicare Advantage plans in 2020, and that number is expected to grow to 26 million in 2021.
  • Enrollment in Medicare Advantage has been steadily increasing for the last 15 years, far outpacing overall Medicare growth.
  • People with End-Stage Renal Disease (ERSD) were long banned from Medicare Advantage plans. As of 2021, Medicare Advantage plans are guaranteed for all Medicare beneficiaries, including those with ESRD – thanks to the 21st Century Cures Act.
  • The Affordable Care Act has closed the donut hole in Medicare Part D. As of 2020, there is no longer a “hole” for brand-name or generic drugs: Enrollees in standard Part D plans pay 25 percent of the cost (after meeting their deductible) until they reach the catastrophic coverage threshold.

Medicare coverage is constantly changing. If you have questions regarding any additional changes to your Medicare coverage, be sure to check with your insurance provider.

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