The transition from 2020 to 2021 offers many opportunities for people on Medicare. Whether you use Original Medicare, Medicare Advantage, or Medicare Supplement Insurance, you’ll find plenty of changes on the horizon.
In this guide to 2021 changes to Medicare, we’ll review what happened during 2020, and dive into the Medicare changes and opportunities for 2021.
To say that a lot happened in 2020 is a cosmic understatement. The big disruptor, of course, was COVID-19. The pandemic led to some sizable changes in the Medicare program.
Some of the highlights from 2020 include:
Other than the COVID-19-related changes, the loss of Medigap Plans C, F, and HDF was probably the biggest change to Medicare for 2020. Those plans became unavailable for beneficiaries who first became eligible after 12/31/2019.
This leaves Plan G as the most comprehensive Medigap plan available to all new Medicare beneficiaries. This plan will cover 100% of your Medicare deductibles, copayments, and coinsurance except for the Part B deductible. You’re responsible for the first $198 in Part B expenses for 2020.
Some cost-sharing amounts for 2021 are not yet known - and it could be due to the uncertainty that COVID-19 created. As of now, it’s expected that 2021 Medicare Part B premiums, and Part A and B deductible amounts will be announced in November 2020.
What we do know is that any 2021 Part B Premium increase will be capped by Congress. As part of a budget deal, Congress and the President limited any increase in Part B premium to no more than 25% of the calculated amount. This is designed to help prevent a dramatic increase in premium cost due to the effects of COVID-19.
In general, you can expect relatively small increases in premiums. For historical context, here are the increases from 2019 to 2020:
Keep in mind: The 2021 Part B premium increase will once again be capped by the Social Security cost of living adjustment for qualified Medicare beneficiaries on Social Security. This provision protects your Social Security check from shrinking due to Medicare premium increases. So, for 2021, you’ll have a double-protection against Part B premium increases.
Many of the most exciting and notable 2021 changes to Medicare encompass Medicare Advantage plans. These plans, which are also known as Part C plans, are a private insurance alternative to Original Medicare.
The single biggest piece of news about Medicare Advantage for 2021 relates to those with End Stage Renal Disease (ESRD), also known as kidney failure.
Beginning 1/1/21, Medicare beneficiaries with ESRD will be able to get coverage through Medicare Advantage plans.
Prior to 2021, Medicare Advantage plans were generally able to exclude people with ESRD. This left ESRD patients in a tough spot, since under Original Medicare Part B, they paid 20% of the cost of dialysis. And this can get expensive very quickly since there was no out-of-pocket cap on their expenses under Original Medicare.
Everyone with ESRD will now be able to get Medicare Advantage coverage. This may not reduce the amounts ESRD patients pay early in the year, since many Medicare Advantage plans charge a 20% coinsurance for dialysis as well.
However, the great news for ESRD patients is that every Medicare Advantage plan has an annual out-of-pocket maximum. So once ESRD patients hit their annual spending caps, they’re not required to pay for any more medical expenses the rest of the year.
Another 2021 change to Medicare Advantage is a small test program for delivering hospice benefits.
Historically, hospice coverage was provided by Original Medicare, even if you were in a Medicare Advantage plan. Starting in 2021, 53 Medicare Advantage plans across the country will provide hospice and palliative care. This is a very small number of plans, so it won’t affect most people at this point. However, if the test program works, you may see more Medicare Advantage plans offering this benefit in the future.
Medicare Advantage is the subject of other big 2021 changes to Medicare. Beginning in 2021, additional benefits will be available.
Extra benefits are benefits offered by Medicare Advantage plans that are not covered by Original Medicare. Examples may include:
For 2021, new Medicare benefits will be available. Many of them are designed to help you get care at home, and lend some support to caregivers.
The new extra Medicare benefits in 2021 available through some Medicare Advantage plans include:
But these extra benefits are not required or guaranteed. Instead, they are optionally provided by Medicare Advantage plans, and they can be changed or discontinued from year to year.
Still, the availability of adult day health services and caregiver support will be beneficial for many of those on Medicare who struggle to care for themselves.
For 2021, Medicare Advantage plan premiums are lower on average than in the past. In fact, the average Medicare Advantage plan premium is expected to be 11% lower in 2021 than in 2020.
For 2021, the average Medicare Advantage plan premium will be $21 per month. On the other hand, the annual out-of-pocket maximum for in-network services is rising to $7,550. This is the highest it can be. Many plans will continue to offer lower out-of-pocket maximums.
The other big news in 2021 changes to Medicare is the Part D Senior Savings Model. This model program, which is essentially a five-year test, will cap the price beneficiaries in participating to no more than $35 copays for a 30-day supply for many types of insulin.
Under this new program for 2021, beneficiaries will have access to about 1,700 MAPDs (Medicare Advantage plans with Part D drug benefits) and stand alone Prescription Drug Plans that cap the cost of insulin.
Another great detail about this program is that the cost for insulin won’t change, even if you enter the coverage gap during the year. You’ll still pay the same capped copayment. In addition, you won’t have to meet a deductible to get the $35 copay price. While not every plan has chosen to participate, CMS expects there to be at least one plan in all 50 states, the District of Columbia, and Puerto Rico.
Given the effect of diabetes on the kidneys, patients with ESRD are in position to grab some great new benefits for 2021 and beyond.
For starters, you should make note that we expect a slight increase in Original Medicare costs, for 2021. Though we still don’t know what they’ll be, we expect there to be some increase in the Part B premium, even with the caps that will limit the total rise in costs. You can expect the same thing with deductibles.
As with a normal Medicare Open Enrollment Period, also called the Medicare Annual Election Period (AEP), you should review your current coverage to see if switching plans for 2021 makes sense.
New plans are available each year, so Medicare beneficiaries have until December 7, 2020 to make a change to their plans for the 2021 plan year.
When comparing plans during the Medicare Open Enrollment Period, be sure to look at:
Tip: It’s important to not just jump into a new plan because it has one appealing feature. You want to make sure that your doctors accept any new plan and that your current medications will be covered.
If you use insulin, you may want to consider one of the standalone Prescription Drug Plans or MAPD plans participating in the Senior Savings Model program, if available. It’s estimated that those on insulin could save more than $400 per year on average.
Besides savings on insulin through the Senior Savings Model program, ESRD patients who don’t currently have Medicare Advantage plan coverage should consider it for 2021.
Moving to Medicare Advantage could help ESRD patients in 2 different ways:
In the first case, you can take advantage of the out-of-pocket spending cap that a Medicare Advantage plan can offer. The out-of-pocket cap could be a real benefit for ESRD patients since it’s not only dialysis treatments that could count against the Medicare out-of-pocket maximum (OOPM). All spending on Medicare-approved services and procedures count towards the OOPM, so an ESRD patient might “max out” their spending during 2021 and get substantial relief the rest of the year.
On the other hand, if you have ESRD and are currently covered by a Medigap (Medicare Supplement) plan, you might be able to save money on your monthly premium by switching to Medicare Advantage.
And you might save money or come close to breaking even by switching from Medigap to Medicare Advantage, depending on the premiums and out-of-pocket maximums for plans in your area. Just be sure you run the numbers before making this move.
Note: It can be difficult to get Medicare Supplement insurance coverage back after you move away from it. You might have to go through medical underwriting, which means you may be declined coverage as an ESRD patient with a pre-existing condition, unless you qualify for a guaranteed issue period.
Due to the complexities of Medigap coverage, it’s a great idea to talk to a licensed insurance agent to see if switching to Medicare Advantage is a good idea.
If you still have questions about 2021 changes to Medicare and how they impact you, a licensed insurance agent can help you out.
Call (866) 955-0898 (TTY 711) to speak with a licensed insurance agent, or try our free Medicare plan comparison tool to find Medicare plans in your area. There is no obligation to enroll in a plan.
Healthinsurance.com LLC is a commercial site designed for the solicitation of insurance from selected health insurance carriers. It is not an insurer, an insurance agency, or a medical provider. You may obtain a complete list of available Medicare plans by contacting 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
This site is not maintained by or affiliated with the federal government’s Health Insurance Marketplace website or any state government health insurance marketplace.