By now, you have received a letter from Social Security describing your costs that will be deducted from your Social Security benefit, as well as informing you of your whopping 1.3% increase in benefits. These deductions are typically comprised of your Medicare part B premium, your Medicare part A premium (for those that did NOT pay into Medicare a minimum of ten years or forty quarters while working), any Income Related Monthly Adjustment Amounts (IRMAA), and possibly your Medicare Part C and/or D premiums if you elected to do so at the time of enrollment. In this blog, I will go over the Medicare changes for 2021 that will include premiums and deductibles.

Medicare covers 80% of the Medicare-approved amount on Part B services after you meet your deductible; you cover the additional 20%. Your hospital, or Part A, has additional costs in the form of coinsurance. You can cover these additional costs out of your own pocket, which could be unlimited or utilize Medicare Advantage Plans or Medicare Supplements to mitigate and cap your costs.

  1. Part A (Hospital/Skilled Nursing) Premium: Typically, premium-free but could be up to $485/month
    1. Remember if you worked 40 quarters and contributed to the Medicare system, you will not incur this cost.
  2. Part A Deductible: $1484 per benefit period
    1.  Note that this is NOT an annual deductible but per benefit period; thus, if you do not have additional coverage, it is possible to incur this multiple times per year.
    2. Hospital Stay Coinsurance (days 1-60): $0 per day of each benefit period
    3. Hospital Stay Coinsurance (days 61-90): $371 per day of each benefit period
    4. Hospital Stay Coinsurance (60 lifetime reserve days): $742 per day after day 90 of each benefit period
    5. Skilled Nursing Facility Stay Coinsurance (days 1-20): $0 per day of each benefit period
    6. Skilled Nursing Facility Stay Coinsurance (days 21-100): $185.50 per day of each benefit period
  3. Part B (Medical) Premium: $148.50/month
  4. Part B Deductible: $203/year
    1. The deductible does not apply if the service is considered preventive.
    2. You pay 20% after the deductible is met unless you have additional coverage.

Did you know that your Medicare Part B and Part D (prescription drug coverage) premiums can be higher based on your income? Premiums for Part B and D are based on your income from two years prior and can cost more to those with a higher income. We call this the “success tax” in our office. To determine if you will have additional premiums, see our Medicare FAQs section for an easy-to-read chart. You can file an appeal with the Social Security Administration if you have experienced a change, such as lower income from retirement or loss of a spouse.

If you have questions about Medicare or would like a quick glance of the above costs, go to our Medicare FAQs section on Hovis&

As you can see, it is important to stay on top of Medicare costs each year to budget and prepare for your healthcare expenditures. Give us a call to explore your coverage options and to make sure you are on the best plan to accommodate YOUR needs. At Hovis & Associates, we are contracted with all the major players. So, call today at (800) 411-0737 to see if we can save you money. We make the complicated SIMPLE!

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