2021 Changes to Medicare

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By Lindsay Engle

Now that we’re halfway through 2020 and inching closer to open enrollment period, the changes coming to Medicare in 2021 have been released, including budget updates, reduction in drug costs and more. It’s important that all beneficiaries familiarize themselves with these changes heading into open enrollment as they may influence whether or not you change your current Medicare plan. In this article we’ll outline all the changes beneficiaries can expect to see in the coming year and how it can impact their coverage.

2021 Medicare Dates to Know

First and foremost, you’ll need to mark your calendars for all the essential Medicare dates to know in 2021. Let’s give a quick overview of these important events: 

  • Annual Enrollment Period: This enrollment period happens every fall and allows for Medicare beneficiaries to make changes to their current coverage that will go into effect the following year. For 2021 Medicare coverage, the Annual Enrollment Period runs from October 15, 2020 to December 7, 2020 for your coverage to begin in January 2021.
  • Five-star Medicare Advantage Policy Enrollment: During this Special Enrollment Period that lasts from December 8, 2020  through November 30, 2020, beneficiaries can enroll in a five-star rated Medicare Advantage Plan, Medicare Cost Plan or Medicare Prescription Drug Plan.
  • Medicare Advantage Plan’s Open Enrollment: Running from January 1, 2021 – March 31, 2021 those enrolled in a Medicare Advantage Plan can make a one-time change during this enrollment period.
  • Medicare General Enrollment Period: Also happening from January 1, 20201 – March 31, 2021, beneficiaries who did not enroll in Part A and art B when they were first eligible now have a second chance to do so.

Medicare’s 2021 Budget

Now, let’s get into the changes to Medicare we can expect to see in 2021. One of the biggest changes coming to Medicare next year is President Trump’s new budget that aims to reduce Medicare spending. The goal is to decrease spending by 7% between 2021 – 2030. One of the main measures they’re taking to achieve this is by allowing beneficiaries to see nurse practitioners as their primary caregivers.

There is also a likelihood that providers will see a reduction in their reimbursement rates. This is a controversial topic for many – while it can help save taxpayers’ money, there is also the possibility that it can reduce beneficiaries access to certain doctors.

Medicare Costs in 2021

The Part B premiums have not yet been released, projection from the Centers for Medicare and Medicaid Services (CMS) show that it will cost you around $150 each month. The final amount will be announced this fall.

2021 Changes to Medicare Advantage

Medicare Advantage plans will be seeing some changes in the coming year as well, including an increase in telehealth services and coverages to allow members to be treated safely from their home. As part of the expansion of coverage to include telehealth services, CMS is giving Advantage plans the flexibility to include telehealth providers in certain practice areas including:

  • Dermatology
  • Psychiatry
  • Cardiology
  • Primary Care
  • Gynecology
  • Endocrinology

Another major change to some Advantage plans is coverage for long-term care benefits, including adult day care services, in-home personal care services and home safety modifications.

Additionally, due to changes implemented by the 21st Century Cures Act, beneficiaries with end-stage renal disease (ESRD) can now enroll in Medicare Advantage plans starting in January 2021 and have more coverage options with Medicare. Previously, individuals with ESRD could only enroll in Advantage plans under limited circumstances. Now, organ acquisition costs of kidney transplants will have coverage under the fee-for-service program instead of Medicare Advantage organizations. 

Reduced Drug Costs

As part of President Trump’s new budget to reduce Medicare spending, there is a call to action for Congress to pass a “comprehensive drug pricing reform”, which is estimated to reduce the federal deficit by $135 billion over the next ten years. 

One of the biggest drug cost reductions we’ll see over the next year is for insulin. In 2021, there will now be an option for beneficiaries with Diabetes to join Medicare plans with caps on insulin pricing that will prevent copays from exceeding $35 per month.

Changes to the Star-Rating Program

The Star Ratings program is designed to help beneficiaries compare the price and quality of available health and drug plans. In 2021, we’ll see some changes to how CMS approaches this program to better address and support challenges brought on by the national health crisis. They will now be using 2019’s scores and Star Ratings from 2020 to assign 2021 Star Ratings, which will have the largest impact on Part C (Medicare Advantage) ratings.

State-specific Changes

The only state seeing a major change to coverage in 2021 is New Hampshire. The state passed a new bill called “the birthday rule” that will prevent insurance companies from charging those with disabilities who are Medicare-eligible at a higher rate. Effective January 1, 2021, these individuals under 65 will now have the same premiums as those who are already 65.

Updates to the Physician-Fee Schedule Rule

The physician fee schedule will also see some changes over the next year. The rule will sustain the proposed cuts to psychologists, physical therapists, and social workers, but starting in 2021, physicians will see payment cuts of 8%, and social workers and psychologists will see payment cuts of 7%.

Stay in the Know

There will be a plethora of changes to Medicare in 2021, and with them, significant improvements to health care quality and costs. Whether you’re newly eligible or a current beneficiary, it’s important to stay on top of these changes to ensure you’re making informed decisions when choosing the plan that best suits your needs.

Lindsay Engle is a Medicare Expert for MedicareFAQ.

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