WHAT YOU NEED TO KNOW ABOUT 2021 MEDICARE COSTS
Whether you have original Medicare or a Medicare Advantage Plan, be prepared for possible increases in premiums, co-pays, and deductibles. The actual 2021 costs have not yet been determined by the Federal Government, but you can expect they will increase in 2021.
Medicare costs are adjusted by the government annually and can affect premiums, deductibles, and other cost-sharing aspects of Medicare. While each of the changes may not involve large dollar amounts, it’s important to plan for how any increases will affect your household budget.
Your tax return from two years earlier is used to determine whether you will pay a higher Part B and Part D monthly premiums. For 2021, it will be your 2019 return. For 2021, these thresholds are projected to increase to $88,000 for a single person and $176,000 for a married couple. To request a reduction in that income-related amount due to a life-changing event such as retirement, the Social Security Administration’s SSA-44 Form (Medicare Income-Related Monthly Adjustment Amount Life Changing Event) can be filed.
Estimates for the 2021 Part B premium, which is adjusted each year, will be tricky due to the coronavirus pandemic and its effect on health care services. It is still uncertain what the standard premium will be for 2021. The standard 2021 Part B premium could rise to $153.30 in 2021 from $144.60 in 2020.
The Part B deductible is $198 in 2020 (up from $185 in 2019, and $183 in 2017 and 2018). The Part B deductible for 2021 has not been issued, but the numbers from previous years give us reason for an estimate of $210.
The Part A deductible covers the enrollee’s first 60 inpatient days during a benefit period. If an enrollee needs additional inpatient coverage during that same benefit period, there’s a daily coinsurance charge. In 2020, it’s $352 per day for the 61st through 90th day of inpatient care, and that is projected to increase to $363 per day in 2021. The coinsurance for lifetime reserve days is $704 per day in 2020, and is projected to increase to $726 per day in 2021.
For care received in skilled nursing facilities, the first 20 days are covered Medicare only covers skilled nursing facility care if the patient had an inpatient hospital stay of at least three days before being transferred to a skilled nursing facility. After 20 days, there is a coinsurance that applies to days 21 through 100. For 2020, it is $176 per day, and in 2021 it’s projected to be $181.50 per day.
2021 prescription drug costs that include annual deductibles, copays and catastrophic coverage has been published. For stand-alone Part D prescription drug plans, the maximum allowable deductible for standard Part D plans will be $445.00. Catastrophic coverage begins at $6,550. The copay amounts for enrollees who reach the catastrophic coverage level is $3.70 for generics and $9.20 for brand-name drugs.
Medicare Advantage Plans
Medicare Advantage plans are required to cap enrollees’ out-of-pocket costs for Part A and Part B services (unlike Original Medicare, which does not have a cap on out-of-pocket costs). The cap does not include the cost of prescription drugs since those are covered under Medicare Part D (even when it is integrated with a Medicare Advantage plan).
For the last several years, the cap has been $6,700, although most plans have had out-of-pocket caps below that level. For 2021, the maximum out-of-pocket limit for Medicare Advantage plans is increasing to $7,550 (plus out-of-pocket costs for prescription drugs). Most plans will likely continue to have out-of-pocket caps below the $7,550 amount.
For an Unbiased, no cost review/explanation of your 2021 Medicare choices contact your University of Florida, Nassau County’s Extension Service Family and Consumer Sciences Agent, Meg McAlpine at (904)570-5713. If you currently have Medicare, you can make changes to your prescription drug plan, and your medical and hospital plans for 2021 during Medicare’s Open Enrollment: October 15 and December 7th.
Extension information and services are available to all individuals regardless of race, color, sex or national origin. In accordance with the Americans with Disabilities Act, any person requiring special accommodations to participate in any activity should contact us at (255-7450) within a minimum of 7 days prior to the event so that proper consideration may be given to the request. Hearing impaired persons can access the foregoing telephone number by contacting the Florida Relay Service at 1-800-955-8770 (voice) or 1-800-955-8771 (TDD).