Medicare costs, including premiums, will vary with a person’s circumstances, such as their income. Most Medicare premiums have increased in 2021, some by as little as 1%.

This article will explore the various Medicare parts and their 2021 costs, including premiums. It will also discuss eligibility and some ways to reduce costs.

We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:

  • Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
  • Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
  • Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.

Medicare is a federal health insurance program that covers healthcare for people in the United States. It has several parts:

  • Part A is hospital coverage.
  • Part B covers medical insurance.
  • Part C, also known as Medicare Advantage, is an alternative to original Medicare (parts A and B).
  • Part D covers prescription drugs.

There are several ways a person can be eligible for Medicare. For example, people aged 65 years and over, as well as people under 65 years old but with certain disabilities, are eligible to enroll in the program.

People with end stage renal disease or permanent kidney failure needing dialysis or a transplant are also eligible, regardless of their age.

Medicare premiums can change each year and across parts A, B, C, and D.

Original Medicare

For example, as shown in the chart below, both premiums and deductibles increased for original Medicare (parts A and B) from 2020 to 2021.

Part A 2020Part A 2021Part B 2020Part B 2021

Part A

Part A premiums show a range of costs because the amount depends on how many quarters a person worked. For example:

  • If a person worked at least 40 quarters and paid Medicare taxes, their Part A premium was zero in 2020, and it continues to be zero in 2021.
  • If a person worked at least 30 quarters and paid Medicare taxes, their premium in 2021 is $259. A person who is married to someone who worked for 30 quarters also qualifies for this premium.
  • If a person did not work 30 quarters and did not pay Medicare taxes, their premium in 2021 is $471.

Part B

Most people pay the basic premium for Part B. The premium depends on a person’s modified adjusted gross income (MAGI) from the previous 2 years. For example, the premium for 2021 is based on the MAGI for 2019.

However, if a person’s income from 2 years ago is above a certain amount, they will pay the basic premium plus an income-related monthly adjustment amount.


The deductible for Part A is charged for each benefit period, which refers to the time a person uses inpatient hospital days or skilled nursing facility (SNF) care.

Specifically, a benefit period starts on the day a person is admitted to an SNF or a hospital and ends after 60 consecutive days of a person no longer being in the facility.


In 2021, a person may have to pay coinsurance for hospital and SNF care.

  • In the first 60 days, there is no coinsurance cost.
  • From day 61 to day 90, the charge for in-hospital services is $371 each day.
  • The charge from day 61 to day 90 in an SNF is $742 each day.

Part C

Medicare Part C is also called Medicare Advantage. Private health insurance companies offer these policies, and they must provide at least the same coverage as Medicare parts A and B.

Medicare Advantage plans may also cover prescription drugs, as well as certain other benefits, such as vision, dental, and hearing care.

Premiums vary among Medicare Advantage plans and plan providers.

A person pays the Medicare Advantage plan premium to the plan provider, and they must also pay the Medicare Part B premium.

Part D

Medicare Part D provides prescription drug coverage. Private health insurance companies offer these policies. They will decide which drugs are covered in their plans.

The drug list is called a formulary, and all Part D policies must cover Medicare-allowed drugs — though they may also offer additional drugs.

According to the Centers for Medicare & Medicaid Services, Medicare spent more than $180 billion on prescription drugs in 2017.

The Part D average basic premium for 2021 is $33.06.

There are several ways that a person can reduce Medicare costs, including Medigap, Medicaid, Extra Help, and Medicare savings programs.

The following sections will look at each of these in more detail.


Medicare supplement insurance, also known as Medigap, can help fill gaps in Medicare coverage, including deductibles, copays, and coinsurance.

There are 10 Medigap plans, each identified by a letter: A, B, C, D, F, G, K, L, M, and N. The plans are standardized across the U.S., with the exception of Minnesota, Wisconsin, and Massachusetts.

People can use this online tool to find a Medigap policy.


Medicaid is a means-tested program that can help people with medical costs, and it may offer additional benefits. It is a joint federal and state program, and eligibility may differ between states.

People can check online for the rules in their state.

Extra Help

Extra Help is a federal assistance program that may help people with Medicare prescription costs, including premiums, coinsurance, and deductibles.

The program reduces annual prescription drug costs for each recipient by around $5,000 per year, according to the Social Security Administration.

A person may automatically qualify for the program, or they can also check online to see if they qualify for Extra Help.

Medicare savings programs

There are four Medicare savings programs. These can help people with a low income. Each program has different eligibility rules, and they also may offer different benefits.

The programs are as follows:

People can check with their state to find out about eligibility and benefits.

Medicare costs for 2021 have generally increased, though some parts of the program have seen increases of just 1%.

Monthly premiums vary from zero to $471, depending on the plan, a person’s eligibility, and their healthcare needs.

Several programs may help a person reduce their Medicare costs.