The year 2020 has come to an end, and many of us are thankful for that. With the new year, we will likely see many changes happening around us. One of those changes will be senior citizens’ health insurance, Medicare. Medicare is the federal health insurance program for citizens aged 65 and older, and others who qualify for certain disabilities. Before we enter the new year, here is an overview of Medicare for 2021.
New Medicare costs
Medicare is not free, which is a common misconception. There are monthly premiums for Part A and Part B. However, most beneficiaries get Medicare Part A with a $0 premium. The way to get a $0 premium is by working for 40 quarters (ten years) and pay into FICA taxes. Over that time, you have funded your Part A premium fully and will not have to pay anything monthly.
If you do not have 40 quarters but have 30, you can buy Part A for $259. However, if you do not have the qualifying work history, you can still purchase Part A for $471 in 2021. Medicare Part A has a deductible, which is $1,484 in 2021.
Unlike Part A, Medicare Part B comes with a cost regardless of your work history. The Part B premium was expected to increase from 2020 significantly, but it only increased by $4. The new standard Part B premium in 2021 is $148.50 a month. The annual Part B deductible also had an increase, making the new deductible $203.
Most beneficiaries enroll in a Part D plan for prescription drug coverage. Part D plans are not sold through the government, but you can purchase a Part D plan through a private health insurer if you do not have creditable coverage and want prescription drug coverage. The standard Part D premium in 2021 is around $41 a month for most beneficiaries.
No health questions for Medicare Advantage plans
Private insurance companies sell Medicare Advantage plans to help with cost-sharing expenses since Medicare leaves beneficiaries with out-of-pocket costs. Many beneficiaries are intrigued by Medicare Advantage plans due to low premiums and lack of health questions. However, in previous times, people with end-stage renal disease (ESRD) were denied a Medicare Advantage plan unless there was a Medicare Advantage Special Needs plan in their area.
Beneficiaries with ESRD were denied a plan due to Medicare Advantage’s one health question, which asks if they have ESRD. Luckily, in 2021, that health question will disappear. Therefore, allowing all beneficiaries access to purchase a Medicare Advantage plan indefinitely.
Part D Senior Savings Model
Seniors with diabetes pay double the amount for healthcare compared to non-diabetic seniors, according to The Americans with Disabilities Act (ADA). This is partially due to the cost of insulin, as the cost per vial of insulin in 2020 could cost up to $250 (some diabetics need more than one vial a month).
Typically, yearly insulin costs are un-predictable, as the price per vial could vary from one month to the next. Thankfully, the Part D Senior Savings Model that began on January 1st changes this.
The Part D Senior Savings Model gives beneficiaries the chance to enroll in a participating Part D plan that caps the insulin price at a maximum of $35. Therefore, giving beneficiaries yearly predictable insulin costs.
Many diabetic beneficiaries enrolled in a participating Part D plan in 2020’s Annual Election Period. Beginning on the first of 2021, all diabetic beneficiaries can enroll in one of these Part D plans during a qualifying enrollment and election period.
An overview of Medicare for 2021 is necessary, so you know your Medicare costs and options. For more information regarding Medicare in 2021, contact a trustworthy Medicare brokerage or visit Medicare’s website.