How Is Medicare Changing In 2021?

Medicare is constantly making changes, and 2021 is no exception. From a slightly increased Medicare Part B premium to expanded telehealth coverage, here are 11 Medicare changes to expect for 2021.

1. Medicare Premiums and Deductibles Went Up Slightly

Medicare Parts A and B premiums and deductibles went up slightly, but not by much.

Medicare Part B Costs For 2021

Your Medicare Part B premium (your medical insurance) was $144.60 per month in 2020. That premium is going up $3.90 to $148.50 in 2021. 

Everyone who opts into the Medicare program must pay the Medicare Part B premium, including those who choose a Medicare Advantage plan.

If you meet different income thresholds, you pay more for Medicare Part B. This is called an Income-Related Monthly Adjustment Amount (IRMAA). These adjustments affect about 7% of people with Medicare Part B.

The income thresholds went up slightly – the first adjustment tier is now greater than $88,000 (individual) and $176,000 (joint tax returns):

Similarly, your Medicare Part B deductible is going up $5 for 2021 to $203. Clients who have a Medicare Supplement Plan F do not pay a deductible, so they won’t be impacted. Also, clients with a Medicare Advantage (MA) plan aren’t affected by the Part B deductible. Your MA plan has its own deductible.

Clients with a Medicare Supplement Plan G and Plan N will be subject to the $203 Part B deductible in 2021.

Medicare Part A Costs For 2021

Your Medicare Part A deductible (your hospital insurance) was $1,408 in 2020. It is increasing by $76 to $1,484 in 2021. Almost all of our clients do not pay the Medicare Part A deductible, because all of the Medicare Supplement plans we sell cover it.

The same goes for Medicare Advantage plans – these plans have their own deductible.

Medicare Part A also has daily coinsurance, and it has increased slightly for 2021. You. can see the 2020 vs. 2021 cost-sharing in the following chart:

About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment. 

For the 1% of folks that do pay the Part A premium, it has increased slightly to $471/month in 2021, a $13 increase from 2020. If you had at least 30 quarters of coverage or were married to someone who did, you can buy Part A at a reduced rate of $259 in 2021, a $7 increase from 2020.

Read More: CMS Announced Your 2021 Medicare Parts A and B Costs

2. Medicare Advantage and End-Stage Renal Disease (ESRD)

In the past, the only health question asked on Medicare Advantage (MA) applications was for End-Stage Renal Disease (ESRD). That health question is going away for coverage starting January 1, 2021 (CMS).

ESRD, or kidney failure, affects over 500,000 Medicare beneficiaries. ESRD happens when an individual’s kidneys stop working – permanently. These individuals need dialysis, typically several times per week, until they can get a kidney transplant (Better Medicare Alliance). 

With the 21st Century Cures Act, or Cures Act for short, current MA enrollment restrictions were lifted. CMS estimates an additional 83,000 people with ESRD will enroll in an MA plan by 2026 (AHIP).

While this opens up more options for those with ESRD, it’s a very expensive proposition for Medicare Advantage insurance carriers. CMS is helping MA carriers by giving them payment increases for ESRD treatments, but Medicare Advantage plans may be forced to increase their premiums or reduce their benefits in future years.

3. Lower Insulin Costs

Starting January 1, 2021, you may be able to join a drug plan that offers extra benefits for insulin. 

The Part D Senior Savings Model is available to all people with Medicare, and plans that participate offer many types of insulin at a maximum copay of $35 for a 30-day supply. This offers a savings up to $446 per year.

Read More: Making Insulin More Affordable for People with Medicare

4. Acupuncture Coverage For Chronic Lower Back Pain

Medicare now covers up to 12 acupuncture visits in 90 days for chronic lower back pain.

The back pain is defined as chronic if:

• It has lasted for 12 weeks or longer
• There’s no known cause (not related to cancer, inflammatory, or infectious diseases)
• The pain isn’t associated with surgery

Medicare will also cover 8 more sessions if you show improvement from the first round of treatments. No more than 20 acupuncture treatments can be given yearly.

5. More Telehealth and Virtual Coverage

COVID-19 has accelerated the move towards telehealth and virtual services.

Medicare has expanded its telehealth coverage so you can get medical and health services via interactive audio and video technology. This includes things like consultations and visits that usually happen in a doctor’s office.

Medicare also covers virtual services like E-visits (messages on patient portals) and Virtual check-ins (sending photos or videos for assessments, for example).

6. COVID-19 Coverage

2020 marked the beginning of the COVID-19 pandemic in the United States, and Medicare has promptly stepped in to offer comprehensive coverage for its beneficiaries.

When a COVID-19 vaccine becomes available – many believe this will be in early 2021 – Medicare will cover it in full for all beneficiaries. 

At this time, Medicare also covers:

• FDA-authorized COVID-19 antibody (or “serology”) tests
• COVID-19 lab tests
• All medically necessary hospitalizations (you still pay hospital deductibles, copays, or coinsurances that apply)
• Expanded telehealth coverage

Medicare has also taken additional steps to respond to the coronavirus, including:

• Prior authorizations usually required under Medicare Advantage and Part D drug plans may be waived or relaxed
• Services that usually need to be done in a hospital or healthcare facility to be covered under Medicare can now be done off-site
• Certain requirements for skilled nursing facility care have been waived
• Instructing nursing homes to review their infection control procedures

You can always stay up-to-date on COVID-19 and Medicare here: https://www.medicare.gov/medicare-coronavirus

7. New Payment Options on MyMedicare.gov

You can now pay for certain Medicare premiums with a credit card, debit card, or directly from a savings or checking account. Eligible premiums include:

• Medicare Part A
• Medicare Part B
• Medicare Part D IRMAA (income-related monthly adjustment amount for those with a higher income)

This new online payment system is integrated into your MyMedicare.gov account. 

If you do choose to use a credit or debit card, you can’t set up automatic payments – you have to login and pay the bill every month. You also cannot pay Medicare Advantage or Part D drug plan premiums through this new system.

8. Extra Benefits Under MA Plans For Chronic Health Conditions

Starting January 1, 2021, Medicare Advantage (MA) plans have the flexibility to offer supplemental benefits that target any chronic health condition. In years past, plans were limited to a specific set of conditions.

Examples of extra benefits that can be offered under the Medicare Advantage Special Supplemental Benefits for the Chronically Ill (SSBCI) include:

• Meals
• Transportation for non-medical needs, like grocery shopping
• Pest control
• Carpet shampooing
• Indoor air quality equipment
• Home improvements, like permanent ramps, widening hallways, or widening doorways

9. Part D Catastrophic Coverage Threshold Increasing to $6,550

In 2021, the Part D (drug coverage) catastrophic coverage threshold will increase from $6,350 to $6,550, a $200 increase.

Once you reach this threshold, you’re eligible for the catastrophic benefit period, where coinsurance is only 5% of the cost of the drug or $3.70/$9.20 (generic/brand name).

10. Prior Authorization Required For Procedures Like Rhinoplasties and Vein Ablations

This is a new rule as of July 1, 2020 – CMS has determined that certain procedures are performed for cosmetic purposes. To make sure they’re only done when medically necessary, CMS now requires prior authorization.

These services include:

• Blepharoplasty
• Botulinum toxin injections
• Panniculectomy
• Rhinoplasty
• Vein ablation

Coverage decisions can take up to 10 days. The prior authorization is only required if the procedure will be done in a Hospital Outpatient Department. The same procedures don’t need prior authorization if performed in a doctor’s office.

11. 2021 Medicare & You Handbook

Every year, CMS releases a new Medicare handbook. You can get the digital copy here: 2021 Medicare & You Handbook.

This handbook outlines many of the changes discussed in this article, including COVID-19 coverage, lower insulin costs, the ESRD change for MA plans, acupuncture coverage additions, and more.

Conclusion

Medicare is always making changes, and for 2021, many of those changes include enhanced and extended coverage for beneficiaries.

While Medicare premiums and deductibles have increased slightly, the change isn’t that significant. Overall, Medicare costs in 2021 remain steady.

2021 brings with it expanded telehealth benefits, lower insulin costs, acupuncture coverage, and comprehensive COVID-19 coverage.

If you need Medicare help, call our office at 217-423-8000 to schedule an appointment with a licensed insurance agent.