Medicare in 2021: Here’s What You Need to Know

Cornerstone Wealth Management |
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Many older Americans rely on Medicare for their health care needs. But it’s not always easy to figure out what’s covered and how much it will cost. Medicare benefits change from year to year, and 2021 is bringing an increase in premiums for participants. The good news is, there are other ways to save on Medicare costs. Here’s what you need to know about this year’s changes in Medicare.

Changes to Part A

Medicare Part A generally covers hospital and nursing homestays. While most participants don’t pay a premium for this coverage, those who do will see an increase in their premiums. Here are the changes to be aware of:

  • If you worked for 30 to 39 quarters during your life, your premium will increase $7 for a total of $259 per month
  • If you worked fewer than 30 quarters during your life, your premium will increase $13 for a total of $471 per month

Deductibles for Medicare Part A will also increase this year. For each benefit period—60 days from your first day at the hospital or nursing home—the deductible will be $1,484, which is $76 more than in 2020. If your stay lasts longer than 60 days, you’ll be responsible for paying coinsurance—a percentage of your health care costs. For Medicare participants, this is a daily fee that will vary depending on whether you’re staying in a hospital or nursing home. You can find more information about specific coinsurance costs on the Medicare website.

Changes to Part B

If you have Medicare Part B, you’ll receive coverage for physician fees, outpatient services, medical equipment, as well as certain medications and home health services. Premiums are based on income, so everyone will pay a different amount for this coverage. Across the board, premiums rose in 2021 for Medicare Part B, but the increase is less than it was in 2020. Deductibles for Part B coverage also increased to $203 per year—$5 more than in 2020.

Changes to Parts C and D

Medicare Part C, also known as Medicare Advantage, is a combination of Parts A and B, while Medicare Part D covers prescription drugs. Both of these plans are optional and offered through private insurance companies, so plan costs vary by provider. Premium costs are adjusted based on your income. You can compare plans on the Medicare website.

Changes Due to COVID-19

The COVID-19 pandemic changed the way we think about health care in 2020. To meet the needs of Medicare participants, some changes were made to coverage last year that are still in place. Medicare coverage now includes:

  • No-cost testing for COVID-19
  • All medically-necessary hospitalizations related to COVID-19
  • The COVID-19 vaccine (if you have coverage under Medicare Part D)
  • An expansion of telehealth services
  • Waiver of the 3-day hospital stay requirement to enter a nursing home

Access to health care and the costs associated with it are always changing. And with a new administration in office, we can expect more changes to Medicare coverage and costs. If you’re concerned about how Medicare coverage affects your finances or need more information on premium costs and coverages, talk to your financial professional.


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