Discover how to avoid up to a 25% increase in Medicare Part B 2021 premiums. You could save over $400 per year! People new to Medicare can lower their 2021 costs by doing the following:
- Enroll in Medicare Part B before November 1, 2020.
- Have your 2020 Part B premium of $144.60 withdrawn from your Social Security benefits for at least two months.
By taking the actions above, you limit the rise in Medicare Part B 2021 premiums to no more than the Cost of Living Adjustment (COLA) of 1.3% in 2021. The Medicare Hold Harmless Provision restricts Part B premium increases to protect your social security benefits. COLA gives you a 1.3% increase in social security benefits, which pays any increase in Medicare Part B premium in 2021.
Medicare Part B Premium Costs in 2021
However, if you pay your Medicare Part B premium directly or have Medicaid pay them, you do not qualify for the hold-harmless provision. Thus, you could see up to a 25% increase in Part B premiums in 2021. For example, your $144.60 premium could go up to $180.75 in 2021. Since you pay this increased premium every month, your increased annual cost could be as high as $433.80.
Congress Caps Medicare Part B Premium for 2021
According to a CNBC report, the Senate passed a short-term funding bill signed by President Trump that limits the 2021 Part B premium increase to 25%. This bill is inconsequential for most Medicare beneficiaries because they already have Part B premium deducted from their Social Security benefits, which has a 2021 COLA cap of 1.3%.
The COVID-19 pandemic has increased Part B medical costs. According to the CDC, the percentage of visits to emergency departments or outpatient providers for COVID-like illness (CLI) has increased between March 1 and October 10, 2020. The red line shows CLI increases from 6.25% to 20.25%. Thus, coronavirus illness has increased Part B medical costs in 2020.
The increase in COVID 2020 medical costs may drive up Part B premiums in 2021. The congressional 25% cap will help prevent a spike in premiums.