Facing a complex Medicare system with costs that change each year can feel overwhelming. Understanding these changes and knowing what to expect can help you prepare for changes in 2021.
Here are some simple explanations of what to expect for Medicare costs in 2021, as well as a few ways you can get help paying for your care.
The Centers for Medicare & Medicaid Services (CMS) attributed much of the increased costs for Medicare Part B to the rising cost of prescription drugs and the increase in physicians prescribing these drugs. However, for the increased cost in Medicare parts A and B overall, there is no single cause. Medicare is a part of the Social Security Administration, and it’s adjusted yearly along with other elements of Social Security.
Medicare parts A and B will likely increase in 2021; however, it’s worth noting that most people with Medicare don’t pay a premium for their Medicare Part A. They’ve worked enough quarters prior to retirement that those costs are covered.
In addition to adjusting the cost of Medicare premiums and deductibles, the Social Security Administration also increases benefits with the cost of living adjustment (COLA). In 2021, the COLA is 1.3 percent. This means that for 2021, many people with Social Security and Medicare may be able to cover the Medicare cost increase with their Social Security benefits increase depending on what the 2021 Medicare rates are.
Use this simple Medicare tool to compare 2021 Medicare plans in your area.
Medicare Part A covers healthcare costs like inpatient hospital visits, skilled nursing facilities, and home healthcare, among other needs. Medicare has not yet announced the 2021 Medicare Part A rates. The following premiums and deductibles are from 2020:
Medicare Part A costs (2020 rates)
|Part A fees||Cost in 2020||Increase from 2019:|
|Inpatient hospital deductible:||$1,408||$44|
|Daily coinsurance for 61st to 90th day:||$352||$11|
|Lifetime reserve days:||$704||$22|
|Coinsurance for skilled nursing facility:||$176||$5.50|
Medicare Part B works in tandem with Part A to ensure your healthcare is covered when it comes to durable medical equipment or outpatient care. Medicare has not yet announced the 2021 Medicare Part B rates. The following premiums and deductibles are Medicare Part B rates in 2020:
Medicare Part B costs (2020 rates)
|Part B fees||Cost in 2020||Increase from 2019:|
|Standard monthly premium:||$144.60||$9.10|
Medicare Advantage plans are purchased through private health insurance providers, and so the adjustment to rates for 2021 will vary. Check with your Part C provider for updated 2021 premium rates.
Rates are usually available for Open Enrollment (October 15-December 7). So, rates for 2021 are already live. The Centers for Medicare & Medicaid Services (CMS) estimates the following average costs for Part C in 2021:
Estimated Medicare Part C costs in 2021
|Part C premiums||Average monthly cost in 2020||Average monthly cost in 2021||Decrease of:|
Medigap plans (Medicare supplement) are a set of plans purchased through private providers that essentially cover costs not otherwise included in your other Medicare coverage. This means that the cost of Medigap plans will vary according to provider and state. (Note: In 2021, Medigap plans C and F are not available for purchase by people new to Medicare after January 1, 2020. )
Since the coverage is specific to your age, needs, location, and insurance provider, the price of a Medigap plan in 2021 will vary greatly. Each company determines individual premiums based on these factors. This is why it’s so important to compare plans and prices when choosing your Medigap provider.
Get help for your Medicare Costs
- Manage your prescription drug costs by switching to a generic drug when possible.
- Apply for Extra Help, an assistance program for prescription drug coverage.
- Apply for co-pay relief or financial aid help from the Patient Advocate Foundation.
- Find out if you qualify for Medicaid, a joint federal and state program that helps pay for medical costs.
- Apply for Medicare Savings Programs like the Qualified Medicare Beneficiary (QMB) Program or the Specified Low-Income Medicare Beneficiary (SLMB) Program. These are state-level discount programs for people with Medicare that meet a certain income limit.
- Medicare costs are changing in 2021. What you pay will depend on which Medicare plans you choose, and not all 2021 Medicare rates have been announced.
- Medicare has several discount and assistance programs available to help reduce Medicare costs.
- Qualifying for these programs is based on several factors including where you live, your income, if you have a disability, and the insurance provider you choose.
This article was updated on October 27, 2020, to reflect 2021 Medicare information.
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