Higher Medicare Premiums For 2021 Announced, Topping Out At $504.90


Medicare premiums and other costs will increase in 2021, the Centers for Medicare and Medicaid Services (CMS) recently announced. But the CMS reported earlier that premiums for the private sector version, Medicare Advantage plans, will decline for 2021.

The basic monthly premium for Part B, which covers most doctor’s services and similar non-hospital care, will increase to $148.50. The Part B premium is $144.60 for 2020, so the increase for 2021 is $3.90 per month, or about 2.70%.

The annual deductible for Part B increases to $203 in 2021, a $5 increase from 2020’s $198 deductible.

For higher-income Medicare beneficiaries, the Medicare premium surtax, also known as the Income-Related Monthly Adjustment Amount (IRMAA), will kick in when adjusted gross income exceeds $176,000 for married couples filing joint returns and $88,000 for single taxpayers.

The IRMAA begins at $59.40, making the total monthly cost of Part B $207.90 for those in the lowest IRMAA bracket.

The IRMAA rises as adjusted gross income increases. The maximum IRMAA in 2021 will be $356.40, bringing the total monthly cost for Part B to $504.90 for those in that bracket. The top IRMAA bracket applies to married couples with adjusted gross incomes of $750,000 or more and singles with $500,000 or more of income.

There’s a two-year lag between the level of adjusted gross income and IRMAA. Income levels for 2019 are used to determine a beneficiary’s IRMAA for 2021.

Previously, CMS announced that costs of Medicare Advantage programs would decline for 2021. The 2021 premiums for Advantage plans on average will be 34.2% lower than in 2017 and at their lowest level in 14 years. Medicare Advantage plans are offered by private insurers, though they are regulated by CMS. Each Advantage plan sets its own premiums and benefit levels.


The Part A deductibles and coinsurance amounts also will increase for 2021.

Details on all the changes can be at the CMS web site and at the Medicare web site.

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