Have you looked at your Medicare premiums and deductibles and thought, “Hmm…these seem more expensive than I thought.” You’re not alone. Others are scratching their heads and wondering the same thing. Let’s crunch the numbers on exactly how much Medicare premiums and deductibles have gone up in 2021 and why.
Last year, the Centers for Medicare and Medicaid Services (CMS) announced that Medicare premiums and deductibles would experience a moderate increase in 2021. Now that this increase has happened, standard monthly premiums for Medicare Part B have been increased to $148.50, up $3.90 from last year’s price. For Medicare Part A, which has an inpatient deductible that is paid each time the patient is admitted to the hospital, deductibles have risen from $1,408 in 2020 to $1,484 in 2021. It’s also worth noting that Part B beneficiaries who earn more than $88,000 a year will pay more than the previously listed amount. A Part B beneficiary earning $100,000 a year, for example, will pay $207.90 per month in premiums.
The recent increase in Medicare premiums and deductibles is largely due to COVID-19, similar to a lot of things we have experienced over the past year. Increased emergency Medicare spending brought on by the pandemic is one of the main causes of the increase in Medicare prices in 2021. CMS actuaries originally estimated Medicare premiums could increase as much as $50 per month in 2021.
The silver lining? It could have been worse!
This information is general, not specific, and is only meant to give perspectives on matters discussed which may change without notice. It is not intended to be tax or financial advice. Information has been obtained from various sources believed to be reliable, but interpretations and accuracy are not assured. Please contact us for any questions you may have or to revisit your planning strategies.