Medicare Premiums, Deductibles, and Copays Change for 2021

Here are the new numbers for Medicare premiums, deductibles, and copays for 2021.

Part A Costs

Most people don't pay a monthly premium for Medicare Part A (hospital insurance). But if you have to pay for Part A because you or your spouse don't have a long enough work history, you'll pay between $259 (for 30-39 work credits) and $471 (for fewer than 30 work credits).

In 2021, you'll also pay a $1,484 deductible for each benefit period in which you use hospital or skilled nursing inpatient care, in addition to the following copays.

• Hospital days 61-90: $371 coinsurance per day of each benefit period
• Hospital days 91 and beyond: $742 coinsurance per each lifetime reserve day for each benefit period
• Skilled nursing days 21-100: $185.50 coinsurance per day of each benefit period.

Part B Costs

The standard Medicare Part B premium is $148.50 per month in 2021. But some people who were enrolled in Medicare in 2020 or earlier will pay slightly less (about $145 per month) because of a hold harmless provision that doesn't allow Social Security payments to be reduced from year to year for Medicare premiums.

If you first enroll in Medicare Part B during 2021, or you are not collecting Social Security benefits, your premium will be $148.50 per month. Also, if your adjusted gross income is over $88,000 (or $176,000 for a couple), the monthly premium is higher. The monthly surcharges have increased for 2021, as follows:

The Part B deductible for 2021 increases slightly to $203 per year.

The cap on outpatient physical therapy, speech-language pathology, or occupational therapy has been removed, but there are still thresholds, as follows:

• outpatient physical therapy and speech-language pathology combined: $2,080
• occupational therapy: $2,080.

If your therapist tells Medicare that more care is medically necessary and Medicare approves, you can go over the thresholds.

Part C Costs

Beneficiaries of Part C, also called Medicare Advantage, have to pay the Part B premium as well as a monthly premium, although a good number of Advantage plans don't charge a monthly premium, and they generally have lower costs than traditional Medicare plans.

The average monthly premium for Medicare Advantage plans in 2021 has decreased to $21.

Part D Costs

Part D premiums vary depending on the plan you choose, with an average of $30. The maximum Part D deductible for 2021 is $445 per year (though some plans waive the deductible completely).

Also, if your adjusted gross income is over $88,000 (or $176,000 for a couple), you will pay a monthly adjustment amount to Medicare in addition to your monthly Part D premium. Here are the Part D additional amounts for individuals making over $88,000 and married couples making over $176,000:

You no longer have to pay the full amount of your drug costs while in the "donut hole." Once your total yearly drug expense reaches $4,130 (and until your total out-of-pocket costs reach $6,550), you must pay 25% of your drug costs for both brand name and generic drugs. When you are on the other side of the donut hole, you pay 5%, or $3.70 for generics and preferred drugs and $9.20 for brand name drugs, whichever is greater.

There are subsidies available to pay for Part D for those with low income (called Extra Help). See Nolo's article on Extra Help for Part D for more information.

Effective date: Jan 01, 2021