You’ve probably heard the news – there are big changes coming in 2022! Every Medicare beneficiary should know what to expect in the upcoming year so that they can plan accordingly. We’ve got a breakdown of the most important changes to be aware of.
Medicare Premium Increase in 2022
Medicare rates have increased in nearly every aspect. No beneficiary will be untouched by these changes. We’ll give you the most important numbers to be aware of in 2022.
Part A Updates
If you receive premium-free Part A, you won’t notice any change in your monthly payments. As long as you’ve paid Medicare taxes for a total of ten years over your working life, you’re eligible for premium-free Part A.
However, anyone who does have to pay a premium for Part A will see an increase in those amounts. If you paid into Medicare for at least 30 total quarters, your premium would be $274, and if you paid into Medicare for less than 30 quarters, you’d pay the full monthly premium of $499.
Part A is also going to see an increased deductible in 2022. The deductible is increasing to $1556 per benefit period. A “benefit period” begins on the first day you are admitted as an inpatient to a hospital and ends after you have stayed out of the hospital for 60 consecutive days. After that time, the deductible resets.
Once the deductible has been paid, you will pay coinsurance costs for each day you spend as an inpatient. There is no coinsurance expense until day 61. From day 61-90, you will pay $389 per day. Starting on day 91, you’ll pay $778 per day if you have the 60 lifetime reserve days remaining.
Part B Updates
The Medicare Part B premium is increasing by 14.5% in 2022. The standard premium that most beneficiaries will pay is $170.10. High-income earners may pay an adjusted amount, called the Income-Related Monthly Adjustment Amount (IRMAA). Thresholds for this amount increase in intervals but begin at $91,000 for individuals and $182,000 for married couples filing jointly. Once you surpass one of those amounts, your premium will increase by $68, for a total of $238.10.
For a full breakdown of IRMAA calculations, visit Medicare.gov.
Like the Part A deductible, the Part B deductible is also increasing. The increase for 2022 is $30, bringing the deductible to $233. Unlike the Part A deductible, this one is only paid annually.
Part C Updates
Part C plans, also called Medicare Advantage plans, are offered by private insurance carriers. Therefore, any premium changes in these plans are specific to the policy and insurance company. However, on average, these plans are actually decreasing their premiums.
By now, you should have received an Annual Notice of Change (ANOC) from your current Part C carrier. This document will tell you what your 2022 premium will be.
Part D Updates
Like the Part C plans, there is not one premium that applies to every Medicare beneficiary. The insurance company that holds your Part D plan dictates your monthly premiums. They can also dictate your Part D deductible, although most plans use the standard (and maximum) amount. In 20222, that amount is $480.
Another feature of all Part D plans is the catastrophic coverage phase. This is the final phase of coverage, and it occurs after the coverage gap. You will enter catastrophic coverage after you have paid a certain amount in out-of-pocket expenses. In 2022, that amount is $7050. That is up from $6550 in 2021, which is a significant increase.
Social Security Benefits in 2022
We do have a little good news for retirees. Your Medicare premiums and deductibles may be increasing, but so are your Social Security benefits. The Social Security Administration (SSA) considers an increase in benefits each year. This is done by looking at the federal index of consumer goods and services, called the CPI-W. Costs from the third quarter of one year to the third quarter of the next are analyzed to determine any increase.
There have only been three years that the benefits have not been increased. 2022 is not one of those years. Retirees will see a 5.9% increase in their benefits in 2022 – that’s an average of approximately $71 per beneficiary.
If you are concerned about rate increases in 2022, please give us a call and schedule a free consultation with a licensed agent. We can look at all of your insurance options and find one that meets both your budget and healthcare needs.