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Medicare Heads Up: July 31, 2020

A round-up of the state and national Medicare news that matters to consumers

CMS announced Thursday that the average premium for basic Part D coverage will be approximately $30.50 in 2021. | Image: Motortion Films / Shutterstock

Reviewed by our health policy panel.

Welcome to Medicare Heads Up, a regular round-up to deliver state and national Medicare-related headlines that will keep consumers abreast of developments that affect their coverage and costs. This week:

CMS releases average Medicare Part D costs in 2021

CMS announced Thursday that the average premium for basic Part D coverage will be approximately $30.50 in 2021. This average rate applies only to basic coverage, and beneficiaries will have higher costs if they enroll in an enhanced Part D plan (which has additional benefits and may have lower cost sharing). And even among basic plans, this is just an average – actual Part D plan pricing varies considerably from one plan to another.

The trend of increasing prescription coverage options will continue for 2021. According to CMS, the number of stand-alone Part D plans has increased by 200 from 2017 through 2021, and the number of Medicare Advantage Prescription Drug plans has increased by 1,500. Enrollment in Part D has increased 17 percent since 2017, while average premiums have declined by 12 percent.

In addition to premiums, CMS released the 2021 Extra Help benchmarks that determine the portion of a beneficiary’s monthly Part D premium paid for by Extra Help. (These rates vary across the U.S.)

Senate coronavirus legislation would eliminate most 2021 Part B premium increases

A provision in coronavirus relief legislation supported by Senate Republicans would eliminate Medicare Part B deductible and premium increases in 2021.

The Senate Finance Committee published the legislation this week, which would be included in a stimulus package known as the Health, Economic Assistance, Liability Protection and Schools (HEALS) Act. Although premiums wouldn’t increase under the legislation, the government would assess a $3 monthly Part B surcharge to beneficiaries until it recovers the cost of holding premiums and deductibles steady, according to a Senate Finance Committee summary of the legislation.

The legislation would also make other changes:

  • Original Medicare’s expanded telehealth benefits would continue through December 31, 2021, even if the public health emergency ended beforehand. The legislation would also maintain expanded telehealth access for Original Medicare beneficiaries treated at Federally Qualified Health Centers and Rural Health Centers for five years after the public health emergency ends.
  • Medicare has made advance payments to healthcare providers and hospitals to help them stay in business during the coronavirus pandemic. The HEALS legislation would give these providers until January 1, 2021 before they would have to start repaying the loans.

The Senate refused to consider The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act when the House passed it in May. That legislation would have required Medicare to cover coronavirus-related treatment without beneficiary cost sharing.

Advocates also are continuing to push for stimulus legislation to include reforms to Medicare Part B enrollment rules, including a broader Special Enrollment Period (SEP) for those who miss their initial enrollment window.

Advocacy groups warn that legislation creating Social Security and Medicare ‘Rescue Committees’ could lead to benefit cuts

Two advocacy groups have expressed concern that legislation could be included in the Senate coronavirus stimulus package that would lead to Social Security and Medicare benefit cuts.

Proponents of the Time to Rescue United States’ Trusts (TRUST) Act are billing the legislation as a deficit relief bill, but AARP and the advocacy group Social Security Works say the legislation could cause reductions in benefits. The TRUST Act would create Congressional workgroups called “Rescue Committees” to recommend changes that boost the financial outlook for Social Security and Medicare. Those proposals would receive expedited consideration in the House and Senate.

The workgroups may recommend raising the Social Security retirement age or limiting benefits, according to Nancy Altman, the president of Social Security Works. AARP also opposes the legislation, calling it “a bill that is unrelated to the crisis and that wrongly targets Social Security and Medicare to reduce deficits.”

Previous legislation intended to control the federal deficit (The Budget Control Act of 2011) led to significant Medicare reimbursement cuts.

The Senate legislation is cosponsored by eight Republicans and three Democrats. Companion legislation has been introduced in the House. Changes to Medicare or Social Security eligibility would require 60 votes to pass the Senate – and are unlikely to pass the Democrat-controlled House.

Center for a Responsible Federal Budget predicts Medicare will exhaust its reserves in 2023

The Center for a Responsible Federal Budget (CRFB) is predicting Medicare’s hospital insurance trust fund for Part A benefits will be exhausted in 2023 – three years earlier than the Congressional Budget Office (CBO) estimated prior to the coronavirus.

Complicating matters, insolvency could occur even sooner if Congress decides to waive the requirement that hospitals and doctors repay Medicare’s advance payments from the Accelerated and Advanced Payment (AAP) program.

Medicare Part A is financed primarily by payroll tax receipts, which have decreased significantly due to coronavirus-related layoffs. CRFB predicts Congress will need to increase taxes in order to avoid reductions in benefits.

Previously planned Medicare Part A benefit reductions led some medical providers to predict that Medicare beneficiaries would eventually struggle to access care had the reductions been enacted.

CRFB also predicted that coronavirus-related deficits will cause Social Security’s retirement trust fund to exhaust its reserves in 2031 – one year sooner than CBO predicted before the coronavirus crisis.


Josh Schultz has a strong background in Medicare and the Affordable Care Act. He coordinated a Medicare ombudsman contract at the Medicare Rights Center in New York City, and represented clients in extensive Medicare claims and appeals. In addition to advocacy work, Josh helped implement federal and state health insurance exchanges at the technology firm hCentive. He also has held consulting roles, including as an associate at Sachs Policy Group, where he worked with insurer, hospital and technology clients on Medicare and Medicaid issues.

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