The new year is nearly here. Medicare beneficiaries and those collecting Social Security are eagerly waiting to find out how 2022 will change their checkbooks. Each year, there is a Social Security cost-of-living adjustment (COLA) and an update (usually an increase) to the standard premiums for Medicare Parts A and B.
Of course, other Medicare plans will also be updated. There will be changes made to your Part C and Part D plans (Medicare Advantage and prescription drug plans), as well as any Medicare supplement (Medigap) plan you may have.
Some of these changes have just been released, while we are still waiting to hear about others. Let’s discuss what changes we know are up ahead.
Social Security Cost-of-Living Adjustment
Some companies are predicting that the 2022 COLA may be the highest we’ve seen in years. The COLA is based on the 12-month change in the Consumer Price Index (CPI) through the end of September. Calculations for the upcoming year’s COLA are calculated and officially released in early October each year.
Due to the inflation we have seen, companies are predicting a 5.8% increase in 2022. Some are going so far as to estimate that it will be an over 6% increase. Time will tell. One thing is certain; the increase will help Medicare beneficiaries pay the increase in Medicare premiums and deductibles.
Medicare Part A Premiums
Most Medicare beneficiaries enjoy premium-free Medicare Part A. As long as you (or your spouse) has worked 40 quarters or ten years and paid Medicare taxes during that time, you are eligible to receive Medicare Part A for $0.
Those who have not met those requirements will pay a premium based on how many quarters they have worked. The highest Part A premium in 2021 was $471. That applied to individuals who worked fewer than 30 quarters. Those who worked more than 30 quarters but less than 40 quarters paid $259 per month in 2021.
Both of those 2021 numbers are expected to rise, though the Centers for Medicare & Medicaid Services (CMS) has not yet made any predictions on the rates for 2022.
Medicare Part B Premiums
Unlike Part A, everyone enrolled in Medicare Part B pays a monthly premium. (Unless you are enrolled in a Medicare Savings Program that pays this premium for you.) In 2021, the Part B premium was $148.50. It is expected to be raised to $158.50 per month in 2022, for a total increase of $10.
Medicare Part B Deductible
Currently, the Part B deductible is $203. That deductible is also expected to increase by $14 in 2022, for a total deductible of $217. This is an annual deductible.
Medicare Part C Premiums
Premium changes for Medicare Advantage plans will vary based on the plan. While many of these plans have a $0 premium, the average Medicare Advantage plan that included prescription drug coverage was $33.57 this year.
Contrary to other parts of Medicare, Part C premiums are actually decreasing. During the Annual Election Period (AEP), which happens each year from October 15 – December 7, you’ll be able to look at coverage and premium changes in your current plan and compare it to others on the market. Make sure to check your Annual Notice of Change Letter.
You should contact your agent at Senior Benefit Solutions to discuss the upcoming enrollment period and schedule a time to review your current Part C plan.
Medicare Part D Premiums
Premium increases for Part D plans will be dependent on your current plan. The Centers for Medicare & Medicaid Services (CMS) has stated recently that the average monthly premium for a standard Part D plan is projected to be around $33 in the upcoming year. That is an increase of $7 based on the average of $26 for Part D plans in 2021.
Medicare Part D Deductible and Catastrophic Threshold
In 2021, the deductible for Part D plans was $445. We are likely going to see that increase to approximately $485 in 2022. This is a $40 increase.
We will also likely see the threshold for catastrophic coverage increase. This threshold number is the amount that an individual has to spend before qualifying for catastrophic coverage, in which the plan pays 96% of the prescription drug costs. In 2021, it was $6550. In 2022, we are estimating that it will be around $7050. This is a huge leap and one that may be a burden on many individuals.
As we mentioned when discussing Part C premium increases, be sure to schedule a review of your drug plan this year during AEP. While your specific plan could increase the premium, your agent at Senior Benefit Solutions could find a similar plan with a lower premium, lower copays, or lower coinsurance.
All applications for new plans must be submitted by December 7, 2021.
What You Should Do
While there is nothing you can do about adjustments to Social Security or Medicare Parts A and B, you should speak to your agent about changes to your Part C and/or Part D plans. Senior Benefit Solutions can compare your current plan and upcoming changes to other plans on the market. We may be able to find better coverage and maybe even at a cheaper rate.
Give us a call today at (912) 687-3094 to schedule a plan review!