Medicare Part B Premium 2021
In CMS.gov press release, Medicare Part B premium will increase $3.90 from $144.60 in 2020 to $148.50 in 2021. If you enroll in Medicare Part B after November 1, 2020, most beneficiaries will pay the standard $148.20 Part B premium in 2021. Discover how Medicare beneficiaries can avoid this 2.7% Part B increase.
Estimated reading time: 5 minutes
For most Medicare beneficiaries who had Medicare Part B before November 1, 2020, and had their Part B premium withdrawn from their Social Security benefits, you will only have a 1.3% increase in 2021. The Cost of Living Adjustment and the Medicare Hold Harmless Provision restricts your Part B premium increases.
How you can lower your Part B premium costs?
Save Money on Part B Premiums
By having your Part B premiums withdrawn from your Social Security benefits, you can limit the cost of premium increases. In this case, your Part B premium increase is limited to the Cost of Living Adjustment (COLA) which is 1.3% in 2021.
The Medicare Hold Harmless Provision restricts Part B premium increases to protect your social security benefits. However, if you pay your Medicare Part B premium directly, 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, $36.15 more per month equals a $433.80 increase per year!
Congress is helping to limit 2021 Part B Premium increases.
Congress Caps Medicare Part B Premium
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.
The Part B deductible will also increase in 2021.
Medicare Part B Deductible 2021
In addition to the Part B premium increase, the Part B deductible will rise $5 from $198 in 2020 to $203 in 2021. Furthermore, all Medigap Plans after January 1, 2020, require you to pay the Part B deductible. If you are new to Medicare in 2021, the most comprehensive Medicare Supplement you can get is Plan G.
Senior Healthcare Direct can help you find the most cost-effective Medicare Supplement Plan. Call 1-855-468-4717 or get your quote.
If you were a high-income earner, your Medicare Part B premium will increase in 2021.
Medicare Part B Premiums in 2021
The chart shows 2021 Part B premiums for all income levels. Individuals or married couples filing separately who earned $88,000 or less will pay the standard premium of $148.50. Furthermore, if you and your spouse both had modified adjusted gross income (MAGI) of $176,000 or less, you also pay this standard premium.
In all cases, your IRS tax return is from the previous two years. Thus, your 2019 tax return is the basis for your 2021 Part B monthly premiums. For high-income earners whose MAGI is greater than $88,000 per person, you will pay the standard Part B premium of $148.50 plus an Income Related Monthly Adjustment Amount (IRMAA).
For example, with a 2019 MAGI is $120,000, you pay $148.50 + $297 IRMAA for a total monthly payment of $445.50.