Elder law attorneys focus on legal and financial matters that are relevant to senior citizens. Clearly, most seniors will rely on Medicare for health insurance, and many elders are on fixed incomes.
It is important to fully understand the Medicare out-of-pocket expenses. We will provide an overview here, and we will also share the updated figures for the 2021 calendar year.
Four Part Program
There are four distinct parts that make up the Medicare coverage. Part A is the hospitalization portion, and most people qualify for premium-free Part A. There is a deductible per benefit period, and there is co-insurance for especially long hospital stays.
Part B pays for approved treatments and procedures that are provided by doctors and other health care professionals.
The insurance will pay 80 percent of these bills, and you have to pay the other 20 percent out of your own pocket. There is a monthly premium for Part B, and there is a deductible. Most seniors purchase a supplemental policy to cover out-of-pocket expenses.
You can use Part C (alternately called Medicare Advantage Plans) to purchase insurance from a private company that bundles the other three parts together. Most of the plans also include some health care services that Medicare does not cover.
Medicare Part D is the portion of the program that pays for prescription drugs. There are different plans to choose from, but you will pay premiums, and there can be deductibles and co-payments.
Updated Out-Of-Pocket Medicare Costs for 2021
The Part A deductible is $1408 this year, and it will be $1484 in 2021. This deductible will cover the first 60 days of hospitalization, but there is co-insurance for subsequent days.
The daily co-insurance for days 61 through 90 in 2021 will be $371. This is a $19 per day increase over the 2021 co-insurance.
Beneficiaries also receive 60 lifetime reserve days that can be used for stays that exceed 90 days. The co-insurance for these days is going up from $704 to $742 per day.
The Part B annual deductible is being increased by five dollars to $203. Monthly Part B premiums for people that claim $88,000 a year or less on their taxes are $144.60 this year, and they will go up to $148.50 in 2021.
This modest increase is a product of the Continuing Appropriations Act, 2021 and Other Extensions Act (H.R. 8337). This measure put a cap on the Part B increase in light of the economic impact of the novel coronavirus.
People that are in higher income brackets pay progressively more in monthly premiums. You can see all the details if you visit this page: CMS 2021 Medicare Data.
Since there are many different Part C and Part D plans, it would be impractical to try to explain any increases that may have been put in place for 2021.
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