Every Medicare recipient wants to understand their costs, especially when they go up each year. On November 6, 2020, the Centers for Medicare & Medicaid Services (CMS) announced its price increases for 2021. Here are four Medicare cost increases taking effect January 1, 2021 that you need to be aware of and understand.
The cost increase Medicare recipients are most interested in is Part B's monthly premium. For 2021, the base rate is increasing from $144.60 in 2020 to $148.50 in 2021. This is an increase of 2.6%, and only increases the Part B premium by $3.90 per month. But if you're retired and on a fixed income, such as Social Security (which is only increasing 1.3% in 2021), this is probably not a welcome increase.
If you earn over $88,000 per year as a single, or $176,000 for married filing jointly, rates are going up based on your income level, as shown in the table below.
Medicare Part B's deductible is increasing from $198 to $203 for the year. This is a $5 increase and isn't that much in the big picture. Of all the increases, this one is the smallest.
Medicare Part A is your hospital insurance. As you know, hospital expenses can add up and become quite expensive. For 2021, Part A's deductible is increasing from 2020's $1,408 to $1,484 in 2021. This is an increase of $76, or 5.5%. This is your maximum cost for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.
The coinsurance amounts for hospital stays beyond 60 days, and for skilled nursing facility stays, are increasing:
Yes. Medicare Advantage plans and Part D Prescription plans (both are private insurance you purchase on your own) have lower premiums and more plans to choose from.
The average price for Medicare Advantage plans has decreased by 34% since 2017 and has the lowest average monthly premiums since 2007. And there are more plans available to choose from . . . more than 4,800 plans are offered for 2021. This is an increase over about 2,700 plans offered in 2017.
There are more Medicare Part D plans available as well. And their average premium has dropped 12% since 2017. Additionally, you can join a plan that will offer many types of insulin at a maximum copay of $35 for a 30-day supply. The Medicare Plan Finder on the medicare.gov website has an "Insulin Savings" filter that will show the capped out-of-pocket costs for insulin.