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Sixty-seven percent of Medicare Part D beneficiaries may have higher monthly stand-alone 2021 Medicare Part D prescription drug plan premiums

Category: Annual Medicare Plan Changes
Published on 2020-09-27 15:06:58


Based on the current 2020 Medicare Part D plan enrollment (September 2020) and increases in 2021 Medicare Part D plan premiums, we estimate that around 67% of Medicare beneficiaries enrolled in a stand-alone Medicare Part D plan* can expect to see an increase of about $5.33 in their monthly 2021 Medicare Part D plan premiums - unless they change their Medicare plan coverage to a more affordable 2021 Medicare Part D or Medicare Advantage plan.

Increases in average 2021 Medicare Part D premiums

A preliminary analysis of the 2021 stand-alone Medicare Part D prescription drug plans (PDPs) found that the national average 2021 Part D premium (not considering plan enrollment) will increase 1% from $40.90 in 2020 to $41.38 in 2021, supporting the CMS projection of the monthly Medicare Part D plan premiums increasing slightly over the 2020 average premium.

Also, the national average monthly 2021 Medicare Part D premium, weighted by the number of people currently enrolled in each plan will increase to $40.70 or an 8% increase over the 2020 weighted monthly premium of $37.72 .  The national weighted-average monthly premium increase means that if everyone stays in their current 2020 stand-alone Medicare Part D prescription drug plan through 2021, many beneficiaries will see an increase in their monthly premium.

Please note, the average monthly premium in each state or Medicare region will vary from the national average and can be seen in PDP-Facts.com by clicking on your state.

Bottom-line:  The majority of current 2020 Part D plan members can expect premium increases in 2021.

Question:  How about a few examples of 2021 premium increases?

As a state-level example, 94% of the Medicare beneficiaries* in Arkansas who are currently enrolled in a 2020 stand-alone Medicare Part D plan can expect an increase in their 2021 monthly Medicare Part D premiums.  The average increase is $2.46.

As another example, 66% of the people currently enrolled* in a 2020 Florida stand-alone Medicare Part D plan can expect an average increase in their 2021 monthly Medicare Part D premiums of around $4.83.

For more information about how 2020 Part D plans are changing in 2021, please see our PDP-Compare.com to review annual plan feature changes in your state.

* Not considering Low-Income Subsidy eligibility.

Question:  Why are the Q1Medicare.com average Medicare Part D premiums higher than premiums projected by Medicare?

The Centers for Medicare and Medicaid Services (CMS) recently issued a press release projecting a slight increase in 2021 Medicare Part D premiums.  CMS noted that, "This trend of lower Part D premiums, which have decreased by 12 percent since 2017, means that beneficiaries have saved nearly $1.9 billion in premium costs over that time. Further, Part D continues to be an extremely popular program, with enrollment increasing by 16.7 percent since 2017."

The difference between our calculations and CMS' is that we are only considering stand-alone Medicare Part D plans (PDPs) and do not include the premiums for the Medicare Advantage plans (MAPDs).  Many MAPDs have a low or $0 monthly premium and we find these low premiums skew average Medicare Part D drug plan premium figures toward lower values.

Average PDP premium vs. Average weighted* PDP premium vs. CMS' PDP/MAPD average premium

The following chart shows how the average and weighted-average stand-alone Medicare Part D premiums have changed since 2007 - and compares these premium values to the CMS estimated base Medicare Part D premium.

Estimated vs Average vs Average Weighted Medicare Part D premiums

* The projected average premiums weighted by plan enrollment are using the current plan year's September enrollment data (or the latest enrollment data). These projected averages are "updated" next year in this chart using the actual year's enrollment. So we calculate a projected 2020 enrollment-weighted average premium using September 2019 enrollment data (and projected a $41.40 weighted PDP premium) and then in September 2020, we update our 2020 projection using the actual September 2020 plan enrollment data (and now the chart shows a $37.72 actual enrollment-weighted PDP premium for 2020 as people moved to lower-premium plans during the 2020 AEP).

Reminder: Your Medicare plan costs and coverage can (and probably will) change each year.

Please review your ANOC and plan options carefully.  You can learn more about your 2021 Medicare plan options at https://PDP-Finder.com/2021

The annual Open Enrollment Period (AEP or Annual Election Period) for Medicare Advantage plans and Medicare Part D drug plans begins on October 15 and continues through December 7, 2020.  The Medicare Advantage Open Enrollment Period (MA OEP) will begin January 1st and continues through March 31, 2021.

Not sure where to begin?

If you or another Medicare beneficiary needs assistance understanding how your 2020 Medicare plan is changing or to learn more about your 2021 Medicare plan coverage options, please call 1-800-MEDICARE (1-800-633-4227) and speak with a Medicare representative.






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Tips & Disclaimers
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
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  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
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  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
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  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
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