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What does Medicare cost in 2021?

Posted on May 13, 2021 by Justin Cogan

2021 Medicare Costs Explained

Medicare premiums, copayments and coinsurance can change yearly. It’s important to stay up to date so know what to expect to pay for Medicare out of pocket.

The following article will explain basic Medicare costs in 2021. It’s meant to be used as a general guide – Please note that your specific costs may vary depending on your income and other factors.

Have questions about what Medicare will cost for you? Call our team at (800) 950-0608 to explore your options.

Medicare Part A Costs - Hospital Insurance

Medicare Part A Premium Rates

Most people enrolled in Medicare Part A are not responsible for a premium because they paid their Medicare taxes while working. If you have worked for at least 40 quarters – approximately 10 years – and paid Medicare taxes, then your Part A monthly premium is $0 in 2021.

If you worked between 31-39 quarters and paid Medicare taxes, then your Part A monthly premium for 2021 is $259 a month.

Finally, If you worked less than 30 quarters or paid less than 30 quarters in Medicare taxes, your Part A premium is $471 a month.

The Cost of Hospital Stay on Medicare in 2021

Deductibles

To cover the costs of a hospital stay under Medicare Part A, you must first pay your deductible and then your assigned copay per day. The 2021 Medicare Part A deductible is $1,484 per benefit period. A benefit period begins the day you are admitted into the hospital and ends 60 days after you leave.

Copays

Copay cost per-day depends on how long you stay in the hospital. Days 1-60 of a hospital stay are covered 100% with a $0 copay once your deductible is met. Days 61-90 have a $371 per day copay. Once you reach day 91, your copay is $742 per day.

However, any day spent in the hospital over 90 days counts against your lifetime reserve. You have have 60 days of this reserve over your entire lifetime. If you run out of your lifetime reserve days, any day spent in the hospital over 90 days will not be covered by Medicare.

Example

Jackie has a 65 day stay in the hospital. Under Original Medicare, Jackie would pay her Part A deductible of $1,484. On days 1-60, she would have no extra costs because of the $0 copay. However on days 61-65, she would be responsible for a $371 copay per day., which at 5 days would equal $1,855. If you add the copay and the deductible, Jackie's total out-of-pocket expenses would be $3,339 dollars.

The Cost of Care in a Skilled Nursing Facility in 2021

A qualifying inpatient hospital stay of at least 3 days is required before Medicare will cover any care received in a skilled nursing home afterward. During that qualifying hospitalization, your normal Medicare deductible and copays apply.

Once you have been transferred to a skilled care facility, you do not have to pay a deductible, since you will have already met it during your hospital stay. Instead, you must pay a copay per diem.

Medicare Part A covers up to 100 days in a skilled nursing facility. For the first 20 days, you have a $0 copayment. On days 21-100, you have a copayment of $185.50 per day. Every day after day 100, you are responsible for 100% of the cost.

Medicare Part B Costs - Medical Insurance

Medicare Part B Premium Rates

Most people pay the standard Part B premium cost of $148.50 in 2021.

You pay the standard premium amount if:

  • You enroll in Part B regardless of your work or tax history.
  • You automatically have your Medicare premiums deducted from your Social Security benefits.
  • You’re directly billed, or use Medicare Easy Pay for your Part B premiums.

Additional costs apply if you, or if you and your spouse combined, exceed a certain amount of income. If your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you’ll pay the standard Part B premium plus an income-related monthly adjustment amount (IRMAA).

If you have Medicare and Medicaid, your state may pay your premiums up to the full standard Part B amount.

Chart depicting the costs of Medicare Part B premiums in 2021

The Centers for Medicare and Medicaid Services (CMS) offers a more detailed look at IRMAAs and other costs associated with Medicare in 2021.

Medicare Part B 2021 Coverage Costs

Medicare Part B costs are fairly simple in 2021. First, you must pay your $203 Part B deductible. After that, you are responsible for a 20% coinsurance cost, meaning you will pay 20% of the cost of any covered treatments or care received. 

Example

Jackie needs a walker following her 65 day hospital stay. Her walker has a total cost of $300. Under Original Medicare, Jackie would be responsible for covering 20% of that cost, or $60.

How do Original Medicare costs compare to Medicare Advantage in 2021?

Medicare Advantage plans are offered by private insurers, and the costs associated with each plan vary. If you are enrolled in a Medicare Advantage plan, make sure to check your evidence of coverage document or your summary of benefits to determine your exact copay and coinsurance amounts.

However, it’s important to note that Medicare Advantage plans may offer lower premiums and lower deductibles than Original Medicare. Let’s look at another example.

Example

Jackie has a Medicare Advantage plan with a $0 deductible. She experiences a 65 day hospital stay. For days 1-5, she has a $275 dollar copayment. For days 6-90, she has a $0 copay. In total, she will spend $1,375. Under Original Medicare, she would have been responsible for $3,339.

The above is a general example. The rates you are entitled to through a Medicare Advantage plan depends on what plans are available in your area.

Let's discuss your Medicare costs.

Contact us by email today or give us a call at (800) 950-0608 to review Medicare insurance options in your area.

About the Author

Justin Cogan

Justin is a licensed insurance agent with a passion for helping people understand Medicare.

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