Which Medicare Expenses will Increase in Cost Next Year?
Several premiums and deductibles for those seniors with the traditional Medicare health insurance are increasing for the new year, the federal government announced in early November.
Money Talks News’s recent article entitled “These Medicare Expenses Will Jump in January” reported that the rising costs include the following:
- The 2021 Medicare Part B standard premium will be $148.50 per month, an increase of $3.90 from $144.60 in 2020, compared with an increase of $9.10 per month one year ago;
- The 2021 Medicare Part B deductible will go to $203 per year, a tiny bump of $5 from $198 in 2020, compared with an increase of $13 one year before; and
- The 2021 Medicare Part A inpatient hospital deductible will rise to $1, 484. That is an increase of $76 from $1, 408 in 2020. That’s compared with an increase of $44 one year prior.
A bit of good news is that the Part B standard premium and deductible won’t increase by as much as they did for this year. That’s because of a recent federal law that limited the increase in Part B premiums for 2021.
Nonetheless, the Medicare cost increases for 2021 will effectively wipe out part of the 1.3% cost-of-living adjustment (“COLA”) that increases retirees’ monthly Social Security benefit payments in the new year. For the average retiree, the 2021 COLA will be only $20 a month more.
Remember that Medicare Part A covers inpatient hospital services, skilled nursing facility services and some home health care services. Nearly all (99%) of Medicare beneficiaries don’t have to pay a premium for their Part A coverage because of the length of time they’ve worked. They get this because they had Medicare taxes withheld from their paychecks during their working years.
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment and some other medical and health services not covered by Medicare Part A. Part B premiums are based on income, and the standard monthly premium listed above applies to individuals who earn up to $88, 000 and married couples who earn up to $176, 000 and file a joint federal tax return.
Those with higher incomes pay higher Part B premiums. That could range from $207.90 to $504.90 next year, depending on income.
Original Medicare is the traditional Medicare program offered directly by the federal government that includes Medicare Part A and Part B. However, Medicare Advantage plans are available as an all-in-one alternative. These plans are offered by private insurance companies. The costs of Medicare Advantage plans, including any premiums and deductibles, vary by plan and the provider. On average, Medicare
Advantage premiums for 2021 are expected to be 34% lower than they were for 2017, and the average 2021 Medicare Advantage premium will be the lowest since 2007.
Reference: Money Talks News (Nov. 7, 2020) “These Medicare Expenses Will Jump in January”.