Your Guide to Medicare Insurance Coverage in 2021

What Does Medicare Cover in 2021?

The coverage afforded under Medicare is provided under four sections named “parts.” In general, each part offers the following coverage:

• Medicare Part A – Covers inpatient hospital, skilled nursing care after three days of formally being admitted, and hospice care.
• Medicare Part B – Covers outpatient services which may include some services received while as an inpatient in a hospital.
• Medicare Part D – Covers prescription drugs.
• Medicare Part C – Also known as Medicare Advantage, provides coverages afforded under Parts A, B, and D.

When choosing Medicare Part C, your coverage will be provided through a private insurer, instead of directly through original Medicare.

Important Note: Medicare will only cover 80% of any specific medical cost, the remaining 20% is the responsibility of the beneficiary.

Where Medicare stops at 80%, individuals become responsible. Participants can pay the difference out of their own pocket or purchase a Medicare Supplemental Insurance Plan.

How Much Does 2021 Medicare Insurance Cost?

The amount you pay for Medicare Part A will likely be $0. This is because only 1% of the population didn’t pay enough in taxes to effectively pre-pay their coverage. For the remainder of us who have paid Medicare taxes in at least forty quarters of your working life, Medicare Part A is provided to you at no cost after enrolling. Even if you did not pay enough into the system, you may still purchase Part A coverage with a maximum monthly premium of $413.

Important Note: The premiums paid for Medicare do not include deductibles or coinsurance, which you, as the beneficiary, will be responsible for.

This leaves Medicare Part B which covers outpatient services. The amount you will pay for Medicare Part B will be automatically deducted from your social security check, railroad retirement benefits, or office of personnel management benefits.

The monthly premiums you pay will be dependent on your tax return filed in 2017. If you are in one of the following income categories, this is what you will pay in 2021:

• Less than $85,000 – $134 per month
• $85,001 – $107,000 – $187.50 per month
• $107,001 – $133,500 – $267.90 per month
• $133,501 – $160,000 – $348.30 per month
• Above $160,000 – $428.60 per month

For those who file a joint tax return, double the income ranges to determine which category and premium you will be responsible per month.

Who Qualifies for Medicare?

You’re eligible for premium-free Part A Medicare if you’re 65 or older and you or your spouse worked and paid Medicare taxes for at least ten years. You can get Part A at age 65 without having to pay premiums if:

• You’re receiving retirement benefits from Social Security
• You’re receiving retirement benefits from the Railroad Retirement Board
• You’re eligible for either of these benefits but have not yet filed for them
• You or your spouse had a Medicare-covered government job

If you or your spouse did not pay into Medicare taxes while you worked and you’re a permanent resident of the United States and are 65 or older you can get Part A without having to pay premiums if: 

• You’re entitled to Social Security disability benefits for 24 months 
• You’re entitled to Railroad Retirement Board disability benefits for 24 months 
• You’re a patient of kidney dialysis or have a kidney transplant 

 (If you have Lou Gehrig’s disease, your Medicare benefits begin the first month you get disability benefits.)

While most won’t have to pay the Part A premium, everyone must pay for Part B if they want it. The cost will be deducted from your Social Security, Railroad Retirement, or Civil Service Retirement check. If these payments are not applicable to you, Part B premiums will be sent to you by Medicare every three months.

What Is the Difference Between Medicaid and Medicare Insurance? 

While the two terms sound similar, Medicaid is a government-subsidized health insurance program administered by individual states for low-income individuals.

When Is The Medicare Open Enrollment Period for 2021?

Medicare Annual Election Period 2021

Medicare coverage begins each year on January 1^st. However, to participate, you must enroll in Medicare during the open enrollment period for 2021 which is October 15^th to December 7^th 2021.

The first time you enroll in Medicare is called your Initial Enrollment Period. The Initial Enrollment Period begins usually:

• Three months before the month you turn 65
• Includes your birthday month
• Ends 3 months after the month you turn 65

Missing enrollment when you are first eligible may result in a late enrollment penalty. Additionally, you may end up with a gap in coverage if you decide on purchasing Medicare Part B coverage later.

How to Sign Up for Medicare?

Enrollment in Medicare happens through the Social Security office. You can enroll in one of three ways:

• Online at www.socialsecurity.gov
• By calling 1-800-772-1212 (TTY 1-800-0778)
• In-person at your local Social Security Office

If you wish to have a family or friend contact Medicare on your behalf, you can obtain an authorization form from www.medicare.gov when you enroll. Those who worked at a railroad will enroll by reaching out the Railroad Retirement Board at 1-877-772-5772.

For most individuals, enrolling in Medicare Part A is automatic. However, you will need to enroll in Medicare Part B during your Initial Enrollment Period.

What to Do Once Enrolled in Medicare?

Medicare recommends you make an initial preventative medical visit. This visit, which is free of charge, will help establish your medical baseline. The free visit is only offered during the first 12 months after enrolling.

Second, sign up for MyMedicare.gov where you can access personal Medicare information 24 hours a day. Your login provides access to your health care claims, Medicare summary notes, deductible status, and other important information. The website also serves as a convenient location to store all your Medicare information. Here you can also find what Medicare covers and enroll in Medicare’s paperless program.

What is Medicare Part A – Hospital Insurance

Medicare Part A and Medicare Part B are the two parts that make up the Original Medicare beneficiaries program. Parts of Medicare Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. 

Here’s how each Medicare Part A segment breaks down: 

Medicare Part A hospital care coverage:

• Acute care hospitals
• Critical access hospitals
• Inpatient rehabilitation facilities
• Long-term care hospitals
• Mental health care
• Participate in a qualifying clinical research study

Medicare Part A home health care benefits:

• Intermittent or part-time skilled nursing care
• Physical therapy
• Speech-language pathology assistance
• Occupational therapy
• Medical social assistance
• Part-time or intermittent home health aide assistance

Medicare Part A nursing home coverage:

• Specialized nursing services
• Semi-private room
• Meals
• Medical social services
• Rehabilitation services, if medically necessary to treat your illness
• Medical supplies and equipment used in an SNF
• Medications received while in SNF care
• Dietary counseling
• Ambulance transportation to the closest provider if needed services are not provided at the SNF

For a more extensive breakdown of Medicare Part A click here

What is Medicare Part B – Medical Insurance

Medicare Part B is the second half of Original Medicare medical insurance plans which covers certain doctors’ services, outpatient care, medical supplies, and preventive services. Those eligible for Medicare Part B should know that it comes with an annual deductible. After reaching the deductible, you’ll typically pay 20% of the Medicare-approved amount, for the most part, B-covered services, and permanent medical equipment.

Here’s how each Medicare Part B segment breaks down: 

• Preventive services and screenings
• Doctor appointments, including yearly wellness exams
• Lab tests
• X-rays
• Certain vaccinations
• Ambulance services
• Limited home health care
• Outpatient mental health services
• Durable medical equipment, such as walkers, canes
• Certain prescription drugs administered to you in an outpatient setting

Part B also has a monthly premium with a cost that depends on: 

• When you enrolled in Medicare Part B
• If you’re collecting retirement benefits
• If  you’re billed directly for premiums
• Whether you have parts of Medicare and Medicaid
• Whether the modified adjusted gross income on your tax return from two years ago is above a certain amount.*

*If you make above a certain amount, you may have to pay an Income Related Monthly Adjustment Amount (IRMAA). For more information on the Medicare Part B premium, visit Medicare.gov. 

 For a more extensive breakdown of Medicare Part B click here

What is Medicare Advantage?

Medicare Advantage, also known as Medicare Part C, is an alternative to receiving Original Medicare benefits. Instead of receiving your Medicare program benefits through the government, you can get them through a Medicare Advantage plan, made available by Medicare-approved private insurance companies. Medicare Advantage coverage can range in price depending on the plan. 

While there are many types of Medicare Advantage plans, the most common types are HMOs or PPOs that work similarly to a type of health plan you would usually receive through an employer. 

HMO stands for “Health Maintenance Organization.” In these plans, you can only go to doctors, health care providers or hospitals in that plan’s network, excluding urgent emergencies. With HMO’s you usually need to get referrals for tests or to see other specialists from your primary care doctor. 

PPO stands for “Preferred Provider Organization.” These plans let you pay less if you use doctors, health care providers or hospitals in that plan’s network. If you go out of its specified network, you will pay more. 

While all Medicare Advantage plans are required by law to offer the same coverage as Original Medicare Part A and Part B, they do not need to cover hospice care. Another difference between Medicare Advantage and the Medicare program is that some private insurance companies may cover even more than what the federal program does. This can include routine vision, hearing or dental care, prescription drugs, and wellness programs. 

Prescription drugs can be available through Original Medicare by purchasing a Medicare Perscription Drug Plan. 

What are Medicare Supplement (Medigap) plans?

Another Medicare coverage you may have is a Medicare Supplement insurance plan, also known as Medigap. This works with the Original Medicare Part A and B plan to cover certain costs you’d typically pay for out-of-pocket such as copayments, coinsurance, deductibles, and overseas emergency coverage. 

Medicare Supplement Insurance plans do not pay for any costs associated with a Medicare Advantage plan. 

There are ten regulated Medicare Supplement Insurance or Medigap plans offered in most states, except for Massachusetts, Minnesota, and Wisconsin which have their versions. These supplemental plans were made to help compensate for coverage gaps that Original Medicare may have. 

Because these benefits are standardized, everyone will get the same coverage from Medigap plans of the same letter type no matter where you live or which private insurance company you bought it from. Though be aware that premium costs can differ even though the benefits are the exact same. 

The best time to buy a Medigap policy is during your six-month Medigap open enrollment period when you can buy any Medigap policy sold within your state even if you have health problems. You cannot be denied coverage during these six months. This period starts the month you’re 65 and enrolled into Medicare Part B. After this time it will be harder to buy a Medigap policy if you don’t meet medical underwriting requirements. If you’re able to buy one, it may cost more. 

There are many benefits to Medigap plans that many may not be aware of such as: 

• No copays
• Low to no out-of-pocket costs
• You’re able to choose any doctor or hospital that participates in the Medicare program
• No referrals are necessary
• You can enroll when you sign up for Medicare at age 65
• You can obtain coverage out of the United States
• Hospice care
• Excessive medical services charges
• Long-term inpatient care
• Anyone who has Medicare should have a Medigap plan.

What Is Coordination of Benefits?

When you have health coverage in addition to Medicare, certain rules will apply to determine which plan pays what expenses. Medicare, and any other health insurance plan you have, are called “payers.” The rules which determine which plan will pay is called “coordination of benefits.”

In general, Medicare is the primary payer. This means medical costs, which may fall under Medicare and another health insurance plan will be paid by Medicare first. When Medicare reaches a maximum limit, then your Medigap or other secondary plan begins to contribute. In some instances, there may even be a third payer who would assist in covering any remaining costs left over after Medicare and a private plan.

What Medicare Benefits Are Covered Under Medigap?

Medigap policies are designed to bridge the gap between the benefits covered under Medicare and your pocketbook. Your personal medical needs will help determine which Medigap plan is right for you. Before choosing a plan, understand the Medicare benefits available and which ones you may need while enrolled in Medicare.

• Medicare Part A Coinsurance – Under Medicare Part A, inpatient hospital stays are covered for up to 60 days with the exception of a deductible. After 60 days and after meeting the deductible, patients are required to begin paying about $340 in coinsurance per day. After the 90^th day, the coinsurance jumps to about $675 after that.
• Medicare Part A Deductible – Patients admitted to a hospital for three days or more will be required to pay a deductible close to $1,400.
• Medicare Part B Coinsurance – For most outpatient visits, Medicare will pay 80% of the cost leaving the remaining 20% to be picked up by the patient or Medigap policy.
• Medicare Part B Deductible – Before receiving any outpatient services, patients must meet the yearly deductible of about $190.
• Medicare Part B Excess Charges – Health care providers are allowed to charge a higher amount than what they will receive from Medicare. The difference between your final bill and what Medicare will pay is called excess charges. Excess charges are the responsibility of the patient and may be picked up under some Medigap plans.
• Blood – All Medigap plans will pay for the first three pints of blood. Medicare will pay for any amount required after three pints.
• Part A Hospice Care – All Medigap plans will pay for some or all of the copayment and coinsurance required by Medicare. After the copayment or coinsurance has been met, Medicare will pay for the remainder.
• Skilled Nursing Facility Coinsurance – Patients in a rehabilitation facility will receive skilled nursing care. Medicare will pay for the first 20 days of care given and only partially between the 20^th and 100^th of about $165. After 100 days, Medicare no longer pays for skilled nursing services.
• Foreign Travel – If you have a medically necessary service or treatment provided outside the United States, Medicare will not provide any coverage. However, some coverage is available through select Medigap plans.

Although no one will know for certain what their future medical needs will be, understanding your current health requirements and the benefits available, is an essential step in choosing the appropriate Medigap plan.

What Are the Medigap Plans for 2021?

The standardized Medigap plans are named A through N. Each offers different levels of coverage. Premiums for each Medigap plan will vary between the companies who provide them. However, the benefits of each plan regardless of the insurance carrier must be the same. This is why it is important to shop for the most competitive Medigap premium.

Important Note: Medigap plans E, H, I and J are no longer available.

Every year Medicare releases a publication comparing all available Medigap plans. If a private insurance company is offering a Medigap plan, they must provide the coverage specified by Medicare. However, except for Plan A, not all plans must be offered by private insurers. In general, each plan provides the following benefits:

• Medigap Plan A – The simplest plan, Plan A covers the 20% Medicare does not for outpatient care. For most Medicare beneficiaries, outpatient costs represent the highest out-of-pocket expenses.
• Medigap Plan B – The second plan available covers the 20% Medicare does not for outpatient care as well as the Part A hospital deductible.
• Medigap Plan C – Plan C is the most complete program of all the supplemental plans offered. Combining the coverage afforded under Plan A and Plan B, this plan covers both your hospital deductible and 20% coinsurance portion.
• Medigap Plan D – Plan D adds coverage for skilled nursing care not covered by Medicare and foreign travel expense coverage to the hospital deductible and 20% coinsurance provided under Plan A and Plan B.
• Medigap Plan F – As one of the most popular plans, albeit the most expensive, Plan F combines all the coverage provided under Plans A, B, and D while adding coverage for excess charges and deductibles for outpatient care. This is the most complete plan on the list.
• Medigap Plan G – Take everything available through Plan F and subtract the hospital deductible and you are left with all the remaining coverage.
• Medigap Plan K – Plan K is the first plan to offer partial coverage for those items not covered under Medicare. The 20% coinsurance for hospital stays is covered in full under Plan K. However, the outpatient coinsurance, blood, hospice care, and hospital deductible are covered at only 50%. The outpatient deductible and excess charges, as well as foreign travel, are not covered at all under Plan K.
• Medigap Plan L – The second plan is providing a percentage of benefits. Like Plan K, the 20% coinsurance for hospital stays is covered in full. In addition, the same benefits offered under Plan K are available under Plan L, but now at 75% instead of 50%.
• Medigap Plan M – When we get to Plan M, it is easier to state what is not covered than what is included within the benefits offered. For Plan M, all benefits are covered in full except the outpatient deductible and outpatient excess charges. And, the hospital deductible is only covered at 50%.
• Medigap Plan N – This is the last of the Medicare Supplemental Insurance plans. If you compared Plan M and N side-by-side, the only difference you would notice is the hospital deductible is covered in full.

The above standardized Medicare supplemental plans are available in most states. If you live in Massachusetts, Minnesota, or Wisconsin, note that there are differences in the standardized requirements of plans offered to residents of each state.

What is Medicare Plan F?

If you’ve searched for a Medicare Supplement Insurance Plan, it’s likely that “Plan F” has been a coverage option you’ve come across more than once. It’s a favorite amongst many Medicare program users because of its comprehensive benefits that cover some out-of-pocket expenses you may incur. Know that there are insurance companies that also provide high-deductible alternatives to Plan F. These Supplement insurance plans cannot be purchased by themselves. 

For example, if you’re visiting the doctor often and have inconsistent medical costs, Plan F’s coverage could be the plan for you! But if you can afford to pay a little of the costs associated with Medicare upfront, consider a high-deductible version of Plan F. 

The following is a list of costs and benefits covered by Medigap Plan F:

• Part A deductible
• Part B deductible
• Part B excess charges
• Preventative care Part B co-insurance
• Part A hospital and co-insurance plans cost up to an additional 356 days after Medicare beneficiaries benefits are exhausted
• Part B co-insurance or co-payment
• First three pints of blood used in an approved medical procedure (annually)
• Part A hospice care co-payment or co-insurance
• Skilled Nursing Facility (SNF) co-insurance
• Foreign travel emergency

What Are Other Keys Points of Medigap?

While each plan is standardized and available in most states, there are some key points to understand before purchasing a Medicare supplemental, or a Medigap plan. These are a few other key facts to know about Medigap policies:

• Before you may purchase a Medigap policy, you must first be enrolled in Medicare Part A and Medicare Part B.
• If you enrolled in a Medicare Advantage Plan, make sure you can leave the plan before applying for a Medigap policy begins.
• When you are enrolled in a Medigap policy, you pay premiums to a private insurer in addition to the premium paid monthly to Medicare for Part B.
• Medicare supplemental policies cover only one person. Separate policies are required if you wish to insure you and your spouse.
• Medigap policies may be purchased from any insurance company appointment within the state you reside.
• Under state and Federal regulation, Medigap policies are guaranteed This means regardless of your health condition, so long as you pay your premiums, your Medigap policy cannot be canceled and must be renewed yearly.
• A few Medigap policies used to cover prescription drugs up until 2006. Today, if you are seeking prescription drug coverage, it is available through the Medicare Prescription Drug Plan – Part D.

Take your time learning all the facts about Medigap coverage. In the beginning, it may be difficult to keep everything straight. But, once enrolled and as your usage of Medigap plans begins, you will find the coverage afforded remains relatively consistent year after year unless you make a change.

What Is Medicare Part D?

Medicare Part D adds prescription drug coverage to Original Medicare Part A and B, some Medicare Cost Plans, Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans. These are offered by insurance companies and other private companies authorized by Medicare. Medicare Advantage Plans can also offer prescription drug coverage that has the same rules as Medicare Prescription Drug Plans.

What is Medicare Tax / What is the Medicare Tax Rate

Medicare taxes fund Medicare program coverage, the federal program that provides millions of retired and disabled individuals access to medical treatment. 

Medicare Hospital Insurance Tax

No matter what your income is, the government taxes 2.9% on your wages. Employees pay half of this amount (1.45%) through payroll deductions, and their employers pay the other half. In other words, half comes out of your pay and your employer matches that, paying another 1.45% on your behalf. 

Medicare Tax for the Self-Employed

If you’re self-employed, you must pay the entire 2.9% on your own. You’re allowed to deduct half your self-employment tax on the first page of your tax return. Unlike other deductions, this one is beneficial in that it lowers your adjusted gross income. 

Additional Medicare Tax

In November 2013, the Affordable Care Act added 0.9% Medicare surtax, but only for those with earnings over a certain amount. Those who are affected pay a total Medicare tax of 3.8%. As of 2018, these earnings thresholds are:

• $250,000 for married people filing jointly
• $200,000 for single people, heads of households, or qualifying widow(er)s
• $125,000 for married people filing separately

It’s up to the employer to withhold the extra 0.9% from employees who make more than these amounts. 

The Net Investment Income Tax 

Investment income was not always subject to Medicare tax, but the Affordable Care Act changed that. A Medicare contribution tax of 3.8% now also applies to “unearned income”—meaning interest or dividends from investments, as opposed to wages for labor. 

In the end, many taxpayers only have to deal with that first 2.9% flat Medicare tax, unless they are high earners. 

What Is the Next Step?

Compare Medicare Supplement Plans 2021

It is our mission to make the process of selecting the right 2021 Medicare Insurance Plan easy and hassle-free. Licensed insurance agents representing only the top and most reputable insurance companies are ready to assist you in finding the right Medicare supplemental plan. Our services are free and available with no obligation to purchase. Whether you are just beginning your enrollment journey or shopping Medigap plans at any time of the year, the next step is to contact one of our expert agents today!

Medicare Carriers

• Aetna
• Anthem
• Blue Cross Blue Shield
• Cigna
• Continental Life
• Manhattan Life
• Mutual of Omaha
• Transamerica
• United American
• United of Omaha