On Nov. 6, 2020, the Centers for Medicare & Medicaid Services (CMS) released the 2021 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Medicare Part B programs.
Medicare Part B Premiums/Deductibles
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. The Medicare Part B monthly premiums and the annual deductible will be higher than the 2020 amounts.
The standard monthly premium for Medicare Part B enrollees will be $148.50 in 2021, an increase of $3.90 from $144.60 in 2020. An estimated 2 million Medicare beneficiaries (about 3.5%) will pay less than the full Part B standard monthly premium amount in 2021 due to the statutory hold harmless provision, which limits certain beneficiaries’ increase in their Part B premium to be no greater than the increase in their Social Security benefits. The annual deductible for all Medicare Part B beneficiaries is $203 in 2021, an increase of $5 from the annual deductible of $198 in 2020. Premiums and deductibles for Medicare Advantage and Medicare Prescription Drug plans are already finalized and are unaffected by this announcement.
Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts (IRMAA) affect roughly 7 percent of people with Medicare Part B. The Part B Premium can be as much as $504.90 per month depending upon income.
Medicare Part A Premiums/Deductibles
Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.
The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,484 in 2021, an increase of $76 from $1,408 in 2020. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2021, beneficiaries must pay a coinsurance amount of $371 per day for the 61st through 90th day of a hospitalization ($352 in 2020) in a benefit period and $742 per day for lifetime reserve days ($704 in 2020). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $185.50 in 2021 ($176 in 2020).
Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to voluntarily enroll in Medicare Part A. Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $259 in 2021, a $7 increase from 2020. Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $471 a month in 2021, a $13 increase from 2020.
Mike Zimmer is president of Bay State Insurance Agency Ltd in Centreville. He is available to answer questions or speak to groups regarding Medicare, Medicare Advantage Plans, Medicare Supplements and Medicare Part D (Prescription Plans). He may be reached at 410-758-1680. For updates and more information, visit and like our Facebook page Bay State Insurance Agency, LTD.