Senior citizens must enroll in Medicare, the government’s health insurance, when they turn 65-years-old unless they have creditable coverage. Medicare tends to change its costs and coverage every year, and The Centers for Medicare and Medicaid Services (CMS) announce these changes right before the new year. Medicare can be a tricky subject to understand, so here are the important points of Medicare in 2021.
When to enroll in Medicare
There is a specific time seniors need to enroll in Medicare if they do not have a form of creditable insurance, such as active employer insurance. If you are no longer actively working, you must enroll in Medicare Part A and Part B during your Initial Enrollment Period (IEP).
Every Medicare beneficiary’s IEP is different from one another, as it is based on your birthday. Your IEP is a seven-month-long period that begins three months before your 65th birthday and ends three months after your birthday month.
For example, if your 65th birthday is May 3, your IEP would open on February 1 and close on August 31. During those seven months, you can apply for Medicare Part A and Part B. However, suppose you delay enrolling in Medicare during your IEP. In that case, you will likely be charged a late enrollment penalty, and you would have to wait until the General Enrollment Period (January 1 – March 31) to enroll in Medicare.
Medicare has a price
A common rumor that spreads easily is that Medicare is free. Unfortunately, that is not true. Both parts of Medicare – Part A and Part B – come with a cost. However, there is a chance you can get Part A for $0.
Medicare Part A covers your inpatient services, such as hospital stays and skilled nursing. If you have worked ten years (40 quarters) in the United States and paid FICA payroll taxes, you can get Part A for $0 a month. As you were paying FICA taxes over that ten-year-period, you were funding your Part A premium.
If you paid payroll taxes for 30 quarters but not 40, you could still get Part A, but you will pay a premium of $259 per month. Now, if you do not have any work history as a U.S. citizen, you will pay $471 for Part A in 2021. However, if your spouse has the qualifying work history for a premium-free Part A, you can get Part A for $0 through your spouse.
Part A has a deductible, which is $1,484 per benefit period in 2021. When you pay the Part A deductible as an inpatient, Medicare will cover your inpatient stay in full for 60 days. If your inpatient stay were to surpass 60 days, you would pay a daily copayment of $371 until day 90 as an inpatient.
Medicare Part B covers outpatient services, such as doctor’s visits, ambulance rides, durable medical equipment, and more. You will pay the Part B premium, despite how many work quarters you have. In 2021, the Part B premium is $148.50, which was only a $4 increase from 2020’s premium.
Regardless if you only have Original Medicare, a Medigap plan, or a Medicare Advantage plan, you will pay the monthly Part B premium. Part B also has an annual deductible, which increased to $203 in 2021.
Once you have paid the Part B deductible, Part B covers 80% of your Medicare-approved outpatient services. However, due to the coronavirus pandemic, Medicare had to make adjustments to this.
Medicare covers coronavirus
According to The Centers for Disease Control and Prevention, the coronavirus is a respiratory virus that has killed eight out of ten seniors aged 65 years and older. With this data, Medicare had to adjust its coverage to ensure seniors can receive the healthcare they need without any roadblocks regarding money.
There are two tests available that you can get to detect the coronavirus: the nasal swab and antibody test. Medicare Part B covers both tests in full if administered by a healthcare physician at a hospital, doctor’s office, drive-thru location, or laboratory.
Typically, when you receive an outpatient service, such as getting tested for a virus, you would either pay the Part B deductible or coinsurance. Thankfully, Medicare is waiving all fees for the coronavirus test.
The U.S. FDA recently released two coronavirus vaccinations for emergency use to help combat the coronavirus pandemic. Moderna and Pfizer-BioNTech are the two coronavirus vaccinations available in the United States and are currently being distributed in phases. If you were to be administered either of these vaccinations, Medicare Part B would cover the cost in full. Therefore, you will not have any out-of-pocket costs for a coronavirus test or vaccination.
It’s important to stay informed about Medicare and its coverage; That way, you can become familiar with the annual changes and learn about the services you have available to you.