Now that 2021 has begun, you do not want to miss opportunities to enroll into Medicare. Some of the popular Medicare advertisements can cause you to panic, thinking there is a particular deadline to change your options or even apply. It is crucial to know the enrollment periods and costs specific to your situation, so you know what applies to you.
Both Part A and Part B costs increased going into 2021. If the premiums and deductibles are costs you are responsible for, you will want to know the new amounts.
Part A is the hospital coverage as an inpatient. When admitted as an inpatient, there is a deductible of $1,484 per benefit period. For most Medicare beneficiaries the Part A premium is $0 per month. However, not everyone has worked the 40 quarters necessary for the $0 premium. If you worked less than 30 quarters in the United States, the Part A monthly premium for 2021 is $471.
Part B is the outpatient medical services. When you have Part B, you must pay the monthly premium, which the standard base premium is $148.50 as of 2021. It increased just slightly from the previous year. The annual deductible also increased from $198 to $203.
When to enroll in Original Medicare
There are three different enrollment periods Medicare beneficiaries use to enroll in Parts A and B. The first is the Initial Enrollment Period (IEP), a seven-month window starting three months before the month your turn 65 and ends three months after the month you turn 65.
The Special Enrollment Period (SEP) is one beneficiaries use when they delay taking Medicare benefits at age 65 and continue to have creditable coverage based on active employment. There is an eight-month window once you lose your creditable coverage to enroll in A and B with no penalty.
The one other way to enroll in Parts A and B is through the General Enrollment Period (GEP). The GEP starts on January 1st of each year and ends on March 31st. You could enroll in A and B during that time if you did not enroll during your IEP or SEP if you had one. Your Medicare coverage will start on July 1st of the same year if you enroll during the GEP.
Part D costs and new insulin model
Medicare beneficiaries will need drug coverage either through a Medicare Advantage plan or a Part D plan. The prescription drug plan premium varies by plan and state. Although Part D has the same four stages built within each plan, not every prescription is covered the same. Copays differ, and not every drug is categorized in the same tier in each plan.
As of January 1st, 2021, some plans introduced the Part D Senior Savings Model. This model has a maximum copay of $35 for a 30-day supply for multiple insulin types. Keep in mind that not every plan has this feature. If you have an insulin prescription, a plan with the Senior Savings Model could help save you money.
There are two Medicare options you can choose from that help with the out-of-pocket costs with Original Medicare. You can choose a Medicare Supplement plan (Medigap) or a Medicare Advantage plan.
A Medigap plan is secondary to Part A and Part B and will pick up the balance for you, leaving you with little out-of-pocket. There is no network of doctors and hospitals. If the provider accepts Original Medicare, they have to accept the Medigap plan. However, these plans do not cover prescriptions, so with this option, it is recommended to get Part D. Typically, you pay your monthly premium, and it is guaranteed renewal each year. Your Medigap carrier will give you a notice of your increase and when to expect it.
Everyone will have an Open Enrollment Period to enroll in a Medigap plan with no health questions. It is a six-month window before and after your Part B effective date. If you do not enroll in a plan during that window, you may answer health questions if you want a Medigap plan at that time.
A Medicare Advantage plan is a network plan where you get all your Medicare benefits through a private insurance company. It requires you to use a network of doctors and hospitals to get coverage from your plan. There is a maximum out of pocket limit with each plan, and most plans bundle drug coverage. Medicare Advantage plan premiums vary by area, so it all depends on where you live.
There was one medical question asked when enrolling into a Medicare Advantage plan before 2021. The question asked if you had End-Stage Renal Disease (ESRD), and if you did, you could not get that coverage. However, the question is no longer asked. You cannot be denied coverage from a Medicare Advantage plan if you have ESRD.
The same seven-month window for the IEP applies to Medicare Advantage plans as well. During the Open Enrollment Period from January 1st to March 31st, you can also change from one Medicare Advantage plan to another or change from a Medicare Advantage plan to Original Medicare with a Part D plan. Special Election Periods are used to enroll in a Medicare Advantage plan throughout the year, but you must qualify for them. Otherwise, the only other time to change plans or enroll in a plan is during the Annual Election Period from October 15th to December 7th.
Medicare costs and options change year to year. It is helpful to know the premium amounts specific to your situation and the enrollment periods. If you do not enroll in Medicare when you are first eligible or do not have creditable coverage and delay Medicare after turning 65, you risk owing penalties. You also must wait for an election period to be available to apply for coverage. You do not want to miss any updates on your coverage.
Author: Danielle K. Roberts is the Vice President and co-founder at Boomer Benefits, where her team of experts help baby boomers with their Medicare decisions nationwide.