Now that the year is coming to a close, the federal benefit programs for seniors are releasing their updated 2021 parameters. In a recent post, we promised to share the new Medicare premiums and deductibles when they become available, and that time is now.
Medicare Part B Premiums and Deductible
Part B is the portion of the Medicare program that pays for treatments that are administered by doctors and other health care professionals.
It should be noted that this is an 80/20 arrangement. The program will cover 80 percent of the costs that are covered, and the beneficiary is required to pay 20 percent
In the previous post that we alluded to in the opening, we touched upon a provision that is contained within the Continuing Appropriations Act, 2021 and Other Extensions Act (H.R. 8337). It limited the 2021 Part B premium increase to no more than 25 percent of the increase that would have been appropriate if the economy was not negatively impacted by a pandemic.
This has equated to a $3.90 per month increase in the standard premium for 2021. It has been $144.60, and it is going up to $148.50 a month in 2021.
These premiums are automatically deducted from Social Security direct deposits. Beneficiaries are “held harmless” if the Part B increase exceeds the amount of the annual Social Security cost-of-living adjustment. This means that their monthly benefit cannot go down at all.
The held harmless provision is not connected to the appropriations bill that was passed in light of the impact of the novel coronavirus.
There are higher premium rates for individual filers that claim more than $88,000 a year on their tax returns. You can visit the Centers for Medicare and Medicaid Services website to see the monthly premium chart that includes all income brackets.
The deductible for Part B is going up ever so slightly. It has been $198 this year, and it will be $203 when the new year rolls around.
Medicare Part A Deductible and Coinsurance
You do not have to pay a monthly premium for Part A, which is the hospitalization coverage. There is a deductible that will cover the first 60 days, and it will rise to $1484 next year. The deductible has been $1408 this year.
Days 61 through 90 are covered, but there are daily coinsurance payments that must be paid out of pocket. The figure for 2021 is $371 a day, and this is a $19 per day increase.
Beneficiaries receive up to 60 lifetime reserve days that apply to stays that exceed 90 days in duration. The coinsurance for these days will go up to $742 in 2021; the figure for this year is $704.
Medicare Part C and Part D
Medicare Advantage Plans are offered under Medicare Part C. These plans are sold by private insurance companies, and they bundle together all of the respective parts. They also include additional insurance that fills in some of the gaps in the standard coverage.
Part D is the prescription drug portion, and these plans are also offered by private insurers that work in conjunction with the Medicare program.
Since there are multiple different plans that you can choose from, we cannot provide hard numbers for 2021. We can tell you that generally speaking, Part C premiums are expected to decrease by 11 percent next year.
Access Our Estate Planning Worksheet
We have developed an estate planning worksheet that you can go through to gain a more thorough understanding of this important process. This is a free resource, and you can visit our worksheet access page to get your copy.
Take Action Today!
We are here to help if you are ready to work with an attorney to develop a custom crafted estate plan that is ideal for you and your family. You can schedule a consultation appointment if you call us at 513-721-1513, and you can fill out our contact form if you would prefer to send us a message.
- What You Need to Know about Planning for Elder Care - March 21, 2023
- Can a Trust Be Contested? - March 16, 2023
- Ohio Medicaid Limits for 2023 - March 14, 2023