Under the Social Security Act, Medicare premiums are adjusted annually. For 2021, the Part B premium increased from $144.60 to $148.50. The annual deductible for the Part B premium went to $203 from $198, and the Part A deductible rose $76 to $1,484.
It is important to note, that in 2007, the Part B premium became subject to IRMAA or Income Related Monthly Adjustment Amount, which is a surcharge on high earners. In 2021, if you are a single earner with more than $88,000 reported income on your tax returns, you will pay $207.90 for your Part B premium instead of $148.50. If you file jointly with a spouse, the surcharge applies to incomes over $176, 000. The premium is increased in income increments to a high of $504.90 for a single earner making over $500,000 income per year or $750,000 for joint filers. Also, in 2011 as part of the Affordable Care Act, the IRMAA applies to Part D drug plans as well. The monthly amount added to the premium of your drug plan ranges from a low of $12.30 to a high of $77.10 depending on income. The surcharges collected for Parts B & D go directly to Medicare and not to the insurance companies.
Cost-sharing also increased under Part A for daily coinsurance rates for hospital stays. From day 61 to 90, the daily rate is $371, up from $352. From day 91 to 150, the rate goes up to $742 from $704 in 2020. For Skilled Nursing Facility care, the rate rose from day 21 to 100 to $185.50 per day, an increase of $9.50.
Most individuals will receive Medicare Part A at $0 premium because they have worked at least 40 quarters or a spouse can qualify through their husband or wife. For those who have at least 30 quarters, they may buy into Part A at $259, and those who have less than 30 quarters may buy in at the full rate of $471.