Changes to Medicare
Changes to Medicare in 2021 include increased premiums and deductibles across several plans, an end to the “donut hole” in Medicare Part D prescription drug plans and changes directly related to the COVID-19 pandemic. There are also expanded telehealth benefits and savings on insulin.
What’s New in Medicare Benefits for 2021?
- Medicare has made extensive changes and expanded benefits in response to the COVID-19 pandemic. These include Medicare COVID-19 coverage for vaccines, treatments and tests. Medicare.gov also provides the latest Medicare and coronavirus information online. You can also call 1-800-633-4227 (TTY users can call 1-877-486-2048) for COVID-19 information.
- Medicare now covers up to 12 acupuncture visits in 90 days for treatment of chronic low back pain. The pain has to last 12 weeks or longer, have no known cause and cannot be related to inflammatory disease, surgery, pregnancy, cancer that’s spread or infectious disease. Medicare will cover an additional 8 sessions if you show improvement.
- Compare providers & services
- Medicare.gov now provides contact information, quality ratings and other information about doctors, hospitals, nursing homes and other health care facilities.
- Insulin costs
- If your Medicare Part D prescription drug plan participates in the “Part D Senior Savings Model,” you can purchase a 30-day supply of insulin for a maximum copayment of $35. This could amount to annual savings of $446 in out-of-pocket costs.
- Medicare coverage choices
- The Medicare.gov plan comparison tool allows you to compare health and drug plans. You can enter your prescription drugs and get more accurate prices for plans in your area.
- Telehealth & E-visits
- Medicare has expanded telehealth benefits allowing you to receive certain medical and health services such as office visits and consultations via real-time audio and visual technology. It also covers certain virtual services such as E-visits and virtual check-ins. You’ll typically pay the same amount as for an in-person visit. This is generally for people in remote areas with limited access to medical offices.
Original Medicare Changes for 2021
Medicare Part A Changes
Most people don’t pay premiums for Medicare Part A since they paid for the coverage through payroll taxes during their working years.
People who have not worked at least 40 quarters (10 years or more) will see higher premiums in 2021.
|Quarters Worked||Monthly Premium Increase||Monthly Premium in 2021|
|30 to 39||$7||$259|
|0 to 30||$13||$471|
The Medicare Part A deductible increased by $76 — up to $1,484 for each benefit period in 2021. A benefit period begins on your first day of hospitalization and lasts for 60 days after you leave. At that point, your deductible starts over.
Medicare Part A coinsurance generally comes into play with extended hospital or care facility stays. Your share of the costs increases the longer you are hospitalized.
|Days You Are Hospitalized||Increase over 2020||Your Costs in 2021|
|1 to 60||No change||$0 per day|
|61 to 90||$19 per day||$371 per day|
|90 and Longer||$38 per day||$742 per day|
|After Lifetime Reserve Days||No change||All costs|
Medicare Part B Changes
Medicare Part B, which covers doctor visits and other medical costs, has increased deductibles and premiums in 2021.
The base monthly premium is $148.50 per month in 2021, up $3.90 from 2020.
The monthly premium you pay increases based on your annual income. Individuals making $88,000 or less and couples making
The Medicare Part B deductible increased by five dollars to $203 in 2021.
Medicare Advantage Changes for 2021
Changes to Medicare Advantage plans in 2021 vary from plan to plan, but the average monthly premium is the lowest on record, according to the U.S. Centers for Medicare and Medicaid Services (CMS) — the federal agency that oversees Medicare.
CMS reports that the average Medicare Advantage plan monthly premium for 2021 is more than 34 percent lower than the 2017 average. There are also an additional 2,100 Medicare Advantage plans available across the United States — 76 percent more than in 2017.
Some of these plans also now offer coverage for End-Stage Renal Disease and cap insulin copayments at $35 a month, starting in 2021.
Medicare Part D Prescription Drug Plan Changes for 2021
Medicare Part D prescription drug plan premiums vary by plan. You’ll need to check with your plan to find out about these changes.
As with Medicare Advantage plans that offer lower insulin costs, you can choose a 2021 Medicare Part D prescription drug plan that caps your out-of-pocket costs for insulin at $35 per month.
The so-called “donut hole” coverage gap is also gone, completely phased out in 2020. It put a temporary limit on what a plan would pay after spending $4,130 on drugs, lasting until you’d spent $6,550 out-of-pocket. With that coverage gap gone, you may pay a smaller percentage of the cost of your prescription medications.
The Part D deductible is $445 for 2021, but it may also vary depending on the plan you have. After you’ve hit your deductible, you will pay 25 percent of your prescription drug costs until you hit the maximum out-of-pocket (MOOP) of $6,550.
After you’ve hit your MOOP, you will be responsible for a $3.70 copayment for generic prescription drugs and $9.20 for brand name medications.
Medigap Changes in 2021
High deductible Medigap Plan F and Plan G saw their deductibles go even higher for 2021 — up $30 to $2,370. You have to pay the deductible out of your own pocket.
Once you hit that deductible, these plans cover all costs for Medicare-approved services.
The plans are not available in all states, but they tend to have lower premiums because they charge higher deductibles.
You are no longer allowed to purchase Medigap Plan C or Plan F if you become eligible for Medicare in 2021. These were plans that covered your Medicare Part B premiums. People who became eligible for Medicare before January 1, 2020, can still purchase these plans and people who enrolled in Plan C or Plan F before then can keep their plans.
Timeline of Historic Medicare Changes
Medicare undergoes changes yearly. Most of these changes affect you in the amount of money you have to spend or the benefits you receive.
Every so often, Medicare changes have a major, historical impact on the federal government’s health care plan.
Medicare was created by an act of Congress providing hospital care, extended post-hospital care and home health care to almost all Americans over the age of 65.
More than 19 million Americans enrolled in Medicare.
Medicare eligibility was expanded to those under 65 with long-term disabilities and End-Stage Renal Disease.
The HMO Act allows health maintenance organizations to contract with Medicare to provide Medicare benefits to beneficiaries who choose to enroll with their plans.
Medigap policies, sold by private insurers, are brought under federal oversight.
Medicare Part C takes effect allowing the sale of Medicare Advantage plans.
The Medicare Modernization Act establishes Medicare Part D prescription drug coverage.
The Centers for Medicare & Medicaid Services reported in mid-2020 that 62.4 million Americans were enrolled in either Original Medicare or Medicare Advantage plans and 47.2 million had separate Medicare Part D prescription drug coverage.
7 Cited Research Articles
- U.S. Centers for Medicare & Medicaid Services. (2020, November 6). 2021 medicare Part B Premiums Remain Steady. Retrieved from https://www.cms.gov/newsroom/press-releases/2021-medicare-part-b-premiums-remain-steady
- U.S. Centers for Medicare & Medicaid Services. (2020, October 28). Health Plans - General Information. Retrieved from https://www.cms.gov/Medicare/Health-Plans/HealthPlansGenInfo
- U.S. Centers for Medicare & Medicaid Services. (2020, September). Medicare and You; The Official U.S. Medicare Handbook 2021. Retrieved from https://www.medicare.gov/Pubs/pdf/10050-Medicare-and-You.pdf
- U.S. Centers for Medicare & Medicaid Services. (2020, August 20). CMS Fast Facts. Retrieved from https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/CMS-Fast-Facts
- U.S. Centers for Medicare & Medicaid Services. (2020, May 22). Trump Administration Announces Changes to Medicare Advantage and Part D to Provide Better Coverage and Increase Access for Medicare Beneficiaries. Retrieved from https://www.cms.gov/newsroom/press-releases/trump-administration-announces-changes-medicare-advantage-and-part-d-provide-better-coverage-and
- American Psychological Association. (2020, April 3). The Latest Medicare Updates Related to COVID-19. Retrieved from https://www.apaservices.org/practice/reimbursement/government/medicare-updates-covid-19
- U.S. Centers for Medicare & Medicaid Services. (2015, July). Milestones 1937-2015). Retrieved from https://www.cms.gov/About-CMS/Agency-Information/History/Downloads/Medicare-and-Medicaid-Milestones-1937-2015.pdf