Medicare announces increases in 2021 Medicare Part A and Part B Premiums and Deductibles

• Cost-of-Living Adjustment (COLA) Increase for Social Security and Supplemental Security Income (SSI) Benefits.
  
  The 2021 Social Security benefits cost-of-living adjustment (COLA) equates to a 1.3 percent increase in the Social Security benefits for 70 million people.
  
  
• Increase in 2021 Medicare Part B Premiums.
  
  The standard monthly premium for 2021 Medicare Part B enrollees will be $148.50, an increase of $3.90 over the 2020 Medicare Part B premium of $144.60 (in 2019, the Part B premium was $135.50).
  
  
• Slight Increase in the 2021 Part B Deductible.
  
  The annual 2021 deductible for all Medicare Part B beneficiaries is $203 an increase of $5 from the annual 2020 deductible (the annual Part B deductible in 2019 was $185).
  
  
• 2021 IRMAA increases for some - Higher Part B Premiums for High-Earners.
  
  People with higher incomes will pay more for their Medicare Part B coverage (and their Medicare Part D drug plan coverage).  Along with higher 2021 Part B premiums, the Part B Income-related monthly adjustment amount (IRMAA) will increase for some individuals earning over $88,000 or couples earning over $176,000.  To learn more, see our article:
  2021 IRMAA: Slight increase in Medicare Part D IRMAA payments for most along with changes in the IRMAA brackets due to annual inflation adjustments.
  
  
• Higher 2021 Medicare Part A Deductible.
  
  The 2021 Medicare Part A deductible will increase $76 to $1,484 from the 2020 deductible of $1,408 (the 2019 Part A deductible was $1,364).
  

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. 

Each year the Medicare premiums, deductibles, and coinsurance rates are adjusted according to the Social Security Act. For 2021, the Medicare Part B monthly premiums and the annual deductible are higher than the 2020 amounts. The standard monthly premium for Medicare Part B enrollees will be $148.50 for 2021, an increase of $3.90 from $144.60 in 2020. The annual deductible for all Medicare Part B beneficiaries is $203 in 2021, an increase of $5 from the annual deductible of $198 in 2020.

The Part B premiums and deductible reflect the provisions of the Continuing Appropriations Act, 2021 and Other Extensions Act (H.R. 8337).

CMS is committed to empowering beneficiaries with the information they need to make informed decisions about their Medicare coverage options, including providing new tools to help them make those decisions through the eMedicare initiative. In addition to the recently released premiums and cost sharing information for 2021 Medicare Advantage and Part D plans, we are releasing the premiums and cost sharing information for Fee-for-Service Medicare, so beneficiaries understand their options for receiving Medicare benefits. As previously announced, average 2021 premiums for Medicare Advantage plans are expected to decline 34.2 percent from 2017 while plan choices, benefits, and enrollment continue to increase. The Medicare Advantage average monthly premium will be the lowest in fourteen years (since 2007). Premiums and deductibles for Medicare Advantage and Medicare Part D Prescription Drug plans are already finalized and are unaffected by this announcement.

Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts  [IRMAA] affect roughly 7 percent of people with Medicare Part B [and include individuals earning over $88,000 and couples earning over $176,000].<

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.

The Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital will be $1,484 in 2021, an increase of $76 from $1,408 in 2020. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2021, beneficiaries must pay a coinsurance amount of $371 per day for the 61st through 90th day of a hospitalization ($352 in 2020) in a benefit period and $742 per day for lifetime reserve days ($704 in 2020). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $185.50 in 2021 ($176.00 in 2020).

Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to voluntarily enroll in Medicare Part A. Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $259 in 2021, a $7 increase from 2020. Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $471 a month in 2021, a $13 increase from 2020.

For more information on the 2021 Medicare Parts A and B premiums and deductibles (CMS-8074-N, CMS-8075-N, CMS-8076-N), please visit:

• (CMS-8074-N)- https://www.federalregister.gov/public-inspection/2020-25024/medicare-program-cy-2021-inpatient-hospital-deductible-and-hospital-and-extended-care-services
• (CMS-8075-N): https://www.federalregister.gov/public-inspection/2020-25028/medicare-program-cy-2021-part-a-premiums-for-the-uninsured-aged-and-for-certain-disabled-individuals
• (CMS-8076-N): https://www.federalregister.gov/public-inspection/2020-25029/medicare-program-medicare-part-b-monthly-actuarial-rates-premium-rates-and-annual-deductible