Every year the costs of Medicare change. The costs of Medicare in 2021 were announced in the late fall and have been in effect since January 1. Facing a Medicare system with costs that change every year can be frustrating—knowing the changes in Medicare costs and understanding what to expect can help you prepare for the Medicare changes in 2021. Here is a rundown of the costs of Medicare in 2021.
Medicare Part A Premium
Medicare Part A is the part of Original Medicare that covers inpatient hospital services, skilled nursing facility care, and hospice care. Medicare Part A is free for most Medicare beneficiaries. If you have worked for at least ten years and paid Medicare payroll taxes, you’ll qualify for premium-free Medicare Part A.
However, if you do not meet the requirements for premium-free Medicare Part A, you are expected to pay a monthly premium of $471 in 2021. Medicare beneficiaries with more than 30 quarters of work experience but less than 40 quarters can pay a monthly premium of $259.
Medicare Part B Premium
The standard monthly premium for Medicare Part B in 2021 will be $148.50, up from $144.60 in 2020. However, if you earn a higher income, you may have to pay more. Surcharges for those that earn high income are based on Modified Adjusted Household Gross Income (MAGI) from two years earlier.
Your 2019 tax return will be used to determine these higher premiums. If your 2019 earnings exceed $88,000 (or $176,000 for married couples filing jointly), you will have to pay a higher standard monthly premium in 2021.
Medicare Part A Deductible
The Medicare Part A deductible that you will pay for a hospital stay will be $1,484 in 2021, up from $1,408 in 2020. This deductible will cover your part of costs for the first 60 days (of each benefit period) you spend in the hospital. In 2021, you must pay a coinsurance amount of $371/day for extended days of hospitalization for days 61 to 90 and $742/day for lifetime reserve days.
Medicare pays for the complete cost for the first 20 days of staying in a skilled nursing facility (SNF) for medically necessary care; after a 3-day hospital admission, you don’t have a copayment. However, the copayment will be $185.50 in 2021 for days 21 to 100, an increase of $9.50 from $176 in 2020.
Medicare Part B Deductible
Medicare Part B comes with a deductible of $203 per annually in 2021, an increase from $198 in 2020. Unlike Medicare Part A, the Part B deductible is not tied to any benefit period. Once you pay your deductible, Medicare pays 80 percent of the Medicare-approved amount. So, you are only liable to pay 20 percent.
For more information on the costs of Medicare in 2021, don’t hesitate to contact Turning 65 Solutions to speak with an experienced Medicare professional that can help you determine how much Medicare will cost you in 2021.