February 4, 2021

Edited 02/09/21

Expected Healthcare Costs for 2021

Medical bills are unpredictable, but our guide to anticipating and preparing for costs will prevent you from being caught off guard by healthcare spending.

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Unfortunately, medical issues—and, of course, the exorbitant bills that come with them—have a way of sneaking up on people. While there’s no way to plan for every cent you’ll ever spend on your health, there are smart ways to look ahead to cost increases, plan for uncertain medical futures, and take advantage of the resources that can help you slash those bills.

Not sure where to start? How about right here! We’re breaking down everything we know about medical costs in 2021 and helping you make sure that a trip to the doc doesn’t break the bank.

Do I have to pay for my COVID vaccine?

If you haven’t already been vaccinated against COVID-19, you might be wondering if the vaccine is free for everyone. The answer is yes (it’s free), and some companies are even offering their employees pay incentives to get it. 

The federal government has committed to buying doses from the pharmaceutical companies creating the vaccines in order to make sure that no Americans have to pay for the medicine itself. 

However, it’s possible that in rare cases your care provider could try to charge you an administrative fee for giving you the shot. If they do, your insurance company should cover this when you make a claim, and if you’re uninsured, the Health Resources and Services Administration’s Provider Relief Fund should cover the fee.

Do not let cost prevent you from getting your vaccination—no one can be denied a vaccine because they can’t afford it.

Health Insurance Costs for 2021

No matter how you’re covered, it’s likely your insurance costs will rise at least modestly in the next year. In recent years, premiums have been rising faster than the cost of wage growth and inflation. If you see a giant jump in cost and qualify to switch your plan, check out eHealth. The site lets you compare thousands of different plans that are right for you and potentially find a more affordable option. 

Each plan looks different, but here’s an idea of the changes you can expect in 2021:

  • Medicare: The standard Part B Medicare premium is going up $3.90 per month in 2021, rising from $144.60 in 2020 to $148.50 in 2021. It’s likely you don’t pay a Part A premium, but Part A deductibles will rise by $76 in 2021, from $1,408 to $1,484 per year. If you have a Medicare Advantage plan, the maximum out-of-pocket limits are increasing for the first time since 2011, raising from $6,700 and $10,000 for in- and out-of-network charges to $7,550 and $11,300 for in- and out-of-network charges.
  • Employee-Sponsored Insurance: Employers can expect a health plan cost increase of about 4.4% in 2021, according to the latest Mercer National Survey of Employer-Sponsored Health Plans 2020. 
  • Non-Medicare Individual Coverage: If you haven’t hit Medicare age and aren’t on an employee-sponsored plan, you can also expect to see a jump in your premium prices this year, though this will vary widely depending on your specific plan and location. Some experts are predicting that, thanks to a rise in COVID testing and treatment, premiums could see an even sharper rise than usual. For instance, in New York, insurers like Oscar covering individuals proposed rate changes as high as a 19% premium increase. However, others proposed little to no rate change at all.

Getting the Most Out of Your Coverage

If you’re one of the unlucky people whose health insurance premiums are increasing in 2021, there may not be much you can do to change your plan outside of open enrollment period. 

However, some life circumstances qualify you for special enrollment periods. If you’ve recently lost your job and the coverage that came with it, adopted a child or gained a dependent, moved, got married, turned 65, or lost coverage due to divorce or a partner’s death, you might qualify to shop around for better plans. You can find out if you qualify to switch now here

If you are able to make a switch, shop around at eHealth to find the plan that’s right for you. The service compares thousands of plans, whether you’re looking for the best Medicare coverage or an individual plan. It will present you with options that fit your needs, so you can choose the one that’s best.

Whether or not you’re able to shop around today or in a few months, keep in mind these top questions to ask yourself as you’re purchasing health insurance and preparing for your medical spending:

  • Can I visit my current doctors and pharmacies? If you have doctors you know and trust, make sure they accept whatever new plan you are considering before making a switch. This is also true about pharmacies, especially if there’s only one or two in your area.
  • What do I do if I get sick under my new plan? You want a plan that makes it easy to get fast, reliable coverage, even if you just want to see a doctor because you wake up feeling a little off or want to make sure your cold isn’t something more serious. Look at the pricing and co-pays for routine trips to your primary care physician or an urgent care clinic, and see if the plan covers virtual visits for minor issues. This kind of preventive care saves you money, stress, and pain down the line. 
  • What does the prescription drug coverage look like? This is an ultra-important question that many people tend to overlook, especially if they’re wooed by a plan with low premiums and deductibles. Look into how much your current drugs would cost under a new plan. If you have a preexisting condition that could require more medicine treatment going forward, you can also ask your doctor what prescriptions you might have to take in the future and see if those would be covered under a new plan. 
  • Are there any wellness incentives? Some health insurance companies don’t exactly come out and advertise these, but many offer free services or perks for staying well. See if your new plan provides resources like a discount for hitting the gym regularly, affordable telehealth visits to deal with stress and mental health, or incentives for seeking preventive care like regular cancer screenings.

Of course, these are all big questions, and it can be difficult to parse through the fine print of all the healthcare plans that want your business. That’s where services like eHealth come in. In just minutes, the online resource evaluates thousands of plans and gives you options that meet your specific needs.

Making Every Dollar Count

Aside from insurance coverage, there are plenty of ways to make sure you’re budgeting for future healthcare costs and making the most of the deals and resources available to you. Check out some of our favorites:

  • Take advantage of a Health Savings Account. If you already have an HSA, make sure you’re maxing it out or using it to pay for qualified out-of-pocket medical expenses. If you don’t have one, you can open your own, even without an employer, through services like Lively. You can check out our guide to optimizing your HSA here.
  • Get a prescription drug savings card. Completely free cards like Hippo can cut your prescription drug spending at any pharmacy by as much as 97%. It’s a no-brainer and a good way to cut outrageous spending on the medicine that you need to thrive.
  • Optimize your tax deductions. If you had medical expenses that exceeded 7.5% of your adjusted gross income in a year, you may qualify for a deduction come tax time. Tax prep software like TurboTax, H&R Block, and TaxSlayer will take a look at your spending and ask you prompting questions to make sure you’re getting the deductions that you’re owed.
  • Rethink your budget. Be prepared for the realities of healthcare spending in your future. Right now, a healthy 65-year-old couple retiring in the US will need $285,000 to pay for healthcare costs for the rest of their lives. Using Silvur to itemize your budget and calculate your Retirement Score is a great way to see where you could cut back on spending to save more for future medical costs.

Got more questions on planning for future spending and keeping your mind, body, and bank account healthy, both before and after retirement? Check out our blog here!