Update to Medicare Deductible, Coinsurance and Premium Rates for Calendar Year (CY) 2021

“This article informs you of the new Calendar Year (CY) 2021 Medicare premium, coinsurance, and deductible rates.

Beneficiaries who use covered Part A services may be subject to deductible and coinsurance (percent of costs that the enrollee must pay) requirements. A beneficiary is responsible for an inpatient hospital deductible amount which is deducted from the amount payable by the Medicare program to the hospital for inpatient hospital services provided in a spell of illness.

When a beneficiary receives such services for more than 60 days during a spell of illness, he or she is responsible for a coinsurance amount equal to one-fourth of the inpatient hospital deductible per day for the 61st through 90th day spent in the hospital. A beneficiary has 60 lifetime reserve days of coverage, which they may elect to use after the 90th day in a spell of illness. The coinsurance amount for these days is equal to one-half of the inpatient hospital deductible. A beneficiary is responsible for a coinsurance amount equal to one-eighth of the inpatient hospital deductible per day for the 21st through the 100th day of Skilled Nursing Facility (SNF) services provided during a spell of illness.

Most individuals age 65 and older, and many disabled individuals under age 65, are insured for Health Insurance (HI) benefits without a premium payment. The Social Security Act provides that certain aged and disabled persons who are not insured may voluntarily enroll but are subject to the payment of a monthly premium. Since 1994, voluntary enrollees may qualify for a reduced premium if they have 30 to 39 quarters of covered employment. When voluntary enrollment takes place more than 12 months after a person’s initial enrollment period, a 10% penalty is assessed for 2 years for every year they could have enrolled and failed to enroll in Part A.

Under Part B of the Supplementary Medical Insurance (SMI) program, all enrollees are subject to a monthly premium. Most SMI services are subject to an annual deductible and coinsurance, which are set by statute. When Part B enrollment takes place more than 12 months after a person’s initial enrollment period, there is a permanent 10% increase in the premium for each year the beneficiary could have enrolled and failed to enroll.”

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