Like health insurance benefits, Medicare benefits can also change from year to year. Most of these changes tend to be minor, but for seniors who may be living on a fixed income it’s important to factor any Medicare rate changes into your budget planning.
So what can Medicare enrollees expect in the coming year?
New in 2021
Medicare premiums are recalculated annually with the changes going into effect on January 1 of the following year.
Medicare is primarily funded by payroll taxes, premiums, and federal budgets. With the coronavirus pandemic affecting the latter source, Medicare Part B premiums would spike in 2021 without Congressional intervention. Protecting enrollees from rising Medicare premiums is an issue that receives bipartisan support and is expected to be addressed in the next coronavirus relief package, or later this fall.
According to CNBC, “The idea is to protect Medicare’s 62.5 million beneficiaries — the majority of whom are age 65 or older — from a spike in Part B premiums due in part to reduced money flowing into the program from pandemic-related economic troubles.”
But while official rate changes haven’t been announced for the coming year and the state of the economy is in uncharted territory, industry experts are still able to make educated estimations on what changes may be forthcoming.
According to USA Today, “The standard Medicare Part B premium is expected to rise 2.7% (or $3.90) to $148.50 per month in 2021 from $144.60 per month in 2020.” Final rates should be announced in October of this year.
Protecting Your Savings
Medicare Supplemental insurance (also referred to as a Medigap policy) helps to fill in the “gap” in coverage between what Medicare Parts A and B cover and what you are forced to pay out of pocket.
If you or a loved one are turning 65 and have questions about your Medicare options a Medicare specialist may be able to help.