By Mark D. Munson
November 23, 2020
The Centers for Medicare and Medicaid Services (“CMS”) recently released key Medicare figures for 2021 that will affect all elderly and disabled individuals who receive program benefits. This notice summarizes the changes and their impact on various benefits.
As is normally the case, Medicare deductibles and premiums have increased for 2021. Many deductibles and co-pays are covered by supplemental Medicare insurance policies, also known as “Medigap” policies (i.e., to cover the “gaps” in Medicare coverage).
Deductibles for hospital coverage under Medicare Part A have been increased for 2021 as follows:
| Medicare Part A
|Days 0 – 60; Patient pays:||$1,484||$1,408|
|Days 61 – 90; Patient pays:||$371 per day||$352 per day|
|Days 91 – 150; Patient pays:||$742 per day||$704 per day|
If an individual has a qualifying medical stay at a hospital (which means three “admitted” nights) and requires skilled nursing or rehabilitative care from a skilled nursing facility upon discharge from the hospital, Medicare will pay the first 20 days in full. Afterwards, the patient is liable for $185.50 per day for the next 80 days and Medicare will pay the balance. This is an increase from $176.00 in 2020. After the 100 day “Medicare coverage period,” the skilled nursing facility will receive payment from the individual, long-term care insurance, or Medicaid. Many “Medigap” policies will pay the $185.50 per day patient liability for days 21 through 100. However, some “Medigap policies” do not have this coverage. Therefore, it is important that you check your “Medigap policy” to see if you have this coverage.
Medicare Part B benefits typically provide coverage for outpatient services, such as doctor visits. Medicare Part B has monthly premiums, an annual deductible, and co-payments. Like Medicare Part A, the annual deductible and co-payments for Medicare Part B can be covered by “Medigap policies.”
The base monthly Medicare premium amount for 2021 is $148.50, which is an increase from the 2020 amount of $144.60. However, the monthly Medicare premium amount can be increased due to higher income (as reported on income tax returns) to a maximum amount of $504.90 per month. Most individuals pay for their monthly Medicare Part B premiums by having the premium amount withheld from their monthly social security retirement or disability benefits.
The annual Medicare Part B deductible for 2021 has increased to $203. It was $198 in 2020. After the deductible has been paid, Medicare typically covers 80% of future Medicare Part B services in that calendar year. Again, many “Medigap” policies are designed to cover the “gap in Medicare coverage,” including the annual deductible and the 20% co-payments.
Medicare and Medicaid benefits are complex and can be quite difficult to understand. Ruder Ware’s elder law and special needs law attorneys are well-versed in these various laws and can help guide you through their complexities so you can better understand what benefits you are entitled to and how to maximize them as part of your long-term care and estate planning.
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