Each year, Medicare benefits, i.e., terms of coverage, change, and for the most part, the costs increase. But Medicare isn’t the only option that sees changes. Medicare Advantage plans and Part D drug plans have coverage changes too.
In 2021, Medicare expands telehealth and transitions to a value-based healthcare system. Medicare Advantage plans begin accepting End-Stage Renal Disease patients, and many policies offer coverage for long-term care.
Yet, these are only some of the ways Medicare is evolving. Below we’ll dive further into how benefits and costs for Medicare are changing in 2021.
Understanding Changes Coming to Original Medicare: Parts A and B
It seems like once you memorize the cost of Medicare, those prices increase. Keeping up with these changes can be like taming a beast: seemingly impossible. Thankfully, every year, Medicare sends out the “Medicare and You” handbook that lists all the benefit and cost changes coming for the new year.
Part A: Inpatient Care Cost Increases
The majority of seniors qualify for premium-free Part A. But, for those that pay for Part A, it costs up to $471 in 2021. If you pay Medicare taxes for 30-39 quarters, the standard Part A premium is increasing to $259.
The deductibles and coinsurance increase for 2021 are as follows:
- $1,484 deductible for each benefit period.
- The coinsurance for days 61-90 is increasing to $371 each day per benefit period.
- The coinsurance for days 90 and beyond will increase to $742 per day for each benefit period.
Tip: Medigap plans can cover these deductibles and coinsurances so that you don’t need to stress about these large numbers.
Part B: Outpatient Care Cost Increases and Benefits Expand
Medicare begins to cover 12 acupuncture visits within 90 days for chronic lower back pain. And they cover eight more sessions if there is an improvement.
Telehealth services are virtual doctor visits. Medicare will cover virtual visits for services that would typically occur in a doctors’ office. Care could include psychotherapy, consultations, and more.
The Part B premium varies depending on income. People with a higher income will pay an income-related monthly adjustment amount. Those with a low income may have a lower premium. But the standard monthly Part B premium is increasing slightly to $148.50. Also, the annual deductible is rising to $203.
Covid is still impacting coverage going into 2021. When a vaccine is made available, Part B must cover it under the CARES act. Medicare will cover it with no cost-sharing responsibility to you.
Part C: Medicare Advantage Benefits Change
For a long time, those with End-Stage Renal Disease couldn’t reap the benefits of Medicare Advantage plans. Well, now that’s all changing. As of 2021, Part C plans will cover those with ESRD.
As for cost changes, Medicare Advantage premiums are down to an average of $21 a month. This is the lowest premium amount since 2007. Also, you can expect to see more options available, even in rural areas.
While premiums are lower, the maximum out-of-pocket limits will be as high as $7,550 for in-network services and $11,300 for out of network care.
Part D: Prescription Drugs Costs and Benefits Change
Lower out-of-pocket costs for insulin has to be one of the best Medicare changes in 2021. Patients that participate in the “Part D Senior Savings Model” could save hundreds of dollars annually.
Now, the standard Part D deductible is rising to $445 in 2021. But some higher premium plans boast a $0 deductible. The donut hole is officially closed; both brand name and generic medications only cost 25% during the coverage gap.
How Is Medicare Transforming in 2021?
Medicare has been working on patients over paperwork for years now. By changing the way provider reimbursement occurs, care goes from “volume-based” to “value-based.”
Previously, doctors would receive compensation each time they would evaluate you, whether or not you become healthier. Now, doctors will get bonuses when they make you healthy instead of how often they see you. The goal? Well, they want lower-cost healthcare that is more efficient.
Why Are There Annual Changes to Medicare?
The cost of health care rises each year. To keep up with inflation, Medicare raises its prices. Also, Medicare finds ways to add benefits to the program, much like we discussed above.
What Is the Best Medicare Plan for 2021?
For the most part, the best Medicare plan depends on your needs. Most people will find that Medigap and Medicare go great together. But some beneficiaries will enjoy Part C coverage. The best plan for you is the one that brings you the most value.
Can I Still Make Plan Changes for 2021 Coverage?
The Medicare Advantage Open Enrollment Period takes place from January 1 – March 31 each year. You must have Medicare Advantage to make any changes during this time.
During this period, you can:
- Disenroll from your Medicare Advantage plan to enroll in a new Part C plan.
- Switch back to Medicare and enroll in Part D.
- Switch from Medicare Advantage to Medigap and Part D.
Critical Takeaways for Medicare in 2021
While prices continue to increase, so do benefits. Medicare is always changing to accommodate the needs of seniors better. When Covid initially began, telehealth expansion became necessary. And when the vaccine is available, coverage will be ready too.
No matter the circumstances, Medicare adapts to suit your needs better, even if it requires a higher premium or deductible.
Are you on Medicare? Which Medicare changes for 2021 will you benefit from? Have you used telehealth since Covid started? Do you think it’s better when doctors charge per visit or per quality of service? Please share your thoughts, expectations, and questions!