2021 Trends in Medicare

Do you feel like every time you start to understand your Medicare benefits, they change again? While keeping up with Medicare adjustments can leave you feeling frustrated, it’s important to understand each year’s updates and how they may impact your medical expenses. Here’s a look at some of the most important changes to Medicare in 2021.

Medicare Part A

Medicare Part A covers expenses related to inpatient hospital care and nursing home stays. It also covers some home healthcare expenses and the cost of hospice care. The changes to Medicare in 2021 resulted in increases in Part A premiums, deductibles, and coinsurance.  

Premium Increase

Most people don’t have to pay for Medicare Part A coverage. This is the case as long as you worked at least 40 qualifying quarters before you retired. However, recipients who worked less than 40 quarters must pay an annual premium. In 2021, those who worked less than 30 quarters over their lifetime will pay $471 a month (a $13 increase), and those who worked 30 to 39 quarters will pay $259 (a $7 increase).

Deductible Increase

The first 60 days following an admission to a hospital or healthcare facility is known as a “benefit period.” During this time, you’ll need to pay a deductible. In 2021, the amount increased by $76, to $1,484. It should be noted that each time you leave a hospital or facility for 60 days or longer, your benefit period resets. If you’re admitted again after that, you’ll have to pay the same deductible again.  

Coinsurance Changes

After your 60-day benefit period ends, a daily coinsurance charge begins. For hospitalization, you’ll now need to pay $371 a day for days 61 through 90. This is a $19 per day increase from 2020. Beyond day 90, you’ll need to pay $742 per day until you’ve used up your lifetime reserve days. This is a $38 increase from 2020.

If you’re admitted into a skilled nursing facility, the numbers are a bit different. In this case, you’ll owe a daily coinsurance for days 21 through 100. The changes to Medicare in 2021 created a $9.50 increase, bringing the new coinsurance amount to $185.50 per day. 

Medicare Part B

Expenses for physician visits, outpatient services, and medical equipment are covered under Medicare Part B. It also covers some home health services and some medications administered by physicians. There was only a small increase to the premium and deductible for Part B Medicare in 2021.

Premium Increase  

Unlike Medicare Part A, most people with Medicare Part B pay a premium. For individuals who make less than $88,000 and couples who make less than $176,000 per year, the 2021 base premium is $148.50. This is an increase of $3.90. Recipients who earn a higher income will see their costs increase incrementally based on their income.

Deductible

The Part B deducible also saw a slight increase. This year you’ll pay $5 more, bringing your total for the year to $203.

Medicare and COVID-19

While changes to Medicare in 2021 have resulted in increased expenses across the board, there is some good news. The 2021 updates also included changes to ensure costs related to COVID-19 are now covered. This includes testing with no out-of-pocket costs and coverage for all medically necessary hospitalizations due to the coronavirus. The COVID-19 vaccine is also covered under all Medicare Part D plans.