An Important Update Regarding Your Medicare

When the New Year comes around, it’s a great opportunity for programs and services to hit the reset button and establish new guidelines. And when it comes to the 2022 calendar year, Medicare is one of those programs that will establish its own updated terms.

Medicare enrollees with higher incomes can expect to pay 14.5% more for their coverage once January rolls around.

This article is going to detail the changes that 2022 will bring to your Medicare Parts A & B premiums and deductibles, as well as Medicare Part D’s income-related monthly adjustment amounts. Those who will be most affected will be those of mid-to-higher incomes. These changes have been announced by the Centers for Medicare & Medicaid Services (CMS), a federal agency that administers Medicare programs. We strongly encourage you to check out the detailed fact sheet here, as much of the information in this article will come directly from the CMS announcement.

Medicare Part B

Let’s start with what will affect the majority of seniors in 2022 — Medicare Part B. Medicare Part B covers doctors’ visits and are covered by monthly premiums. Although everyone’s Part B premiums will differ, the current standard premium for Part B is $148.50 per month. In 2022, that amount will increase by $21.60, making the new premium $170.10 per month. The current annual deductible for Part B beneficiaries is currently $203 per month, but that amount will increase by $30 in 2022, making the new annual deductible $233.

CMS outlined three reasons as to why these increases are occurring in its fact sheet. Aside from health care’s increasing demand, a large reason why premiums and deductibles are increasing is because Medicare is preparing to potentially take on a high-cost drug called Aduhelm, which is designed to treat those with Alzheimer’s disease. It must be clear that, though Medicare is including this as a contributing factor for the increase in premiums and deductibles, the National Coverage Determination analysis that began in July is still active, and coverage determination is still unknown.

Seven percent of Medicare recipients can expect to pay income-related charges. For seniors with high incomes and with Medicare Part B income-related monthly adjustment amounts, refer to the table below to understand what your premium will be. The table directly reflects CMS’ fact sheet.

For high income beneficiaries who are married and live with their spouse during the taxable year, but wish to file a separate return, refer to the table below, as taken directly from CMS:

Medicare Part A

Now that we’ve covered the changes to Medicare Part B, it’s important to also touch on what will be happening with Medicare Part A, which covers hospital costs. Most recipients of Part A do not have to pay a premium because they have acquired at least 40 quarters of “Medicare-covered” employment. This will continue to remain true as 2022 begins, meaning that if you have at least 40 quarters, you should not expect to pay an additional premium cost for Part A.

However, Medicare enrollees who do not have the full 40 quarters of Medicare-covered employment can expect an increase in their premiums. Those who have earned at least 30 quarters of coverage, or are married to someone who has acquired it, will see a $15 increase from $259 per month. Their new premium amount will total $274 per month. Those who have earned less than 30 quarters can expect to see a $28 increase in their premium, meaning their new monthly cost will total at $499 per month.

Now that you have a better understanding on how your premiums can potentially be impacted, it’s time to understand your deductible. According to CMS, the Medicare Part A inpatient hospital deductible will cover a “beneficiaries’ share of costs for the first 60 days or Medicare-covered inpatient hospital care in a benefit period.” Once 2022 rolls around, beneficiaries will have to pay $389 per day for the 61st through 90th day of their hospital stay. This is an $18 increase from 2021, where the amount is $371.

In 2021, the Part A inpatient hospital deductible that beneficiaries faced cost $1,484. In 2022, this amount will increase by $72, making the new deductible out to be $1,556.

Refer to the table below to get a clearer idea of the Part A Deductible and Coinsurance differences between 2021 and 2022.

Medicare Part D

Unfortunately, Medicare Parts A and B aren’t the only parts that are going to be increasing. That’s right, in 2022, beneficiaries and enrollees with Medicare Part D can expect to see prices rise, too. Much like how Medicare Part B’s income-related monthly adjustment amounts affect 7% of its users, Part D’s income-related monthly adjustment amounts affect 8% of its users. In addition, Part D premiums will vary between recipients and their plans.

Refer to the table below to understand the 2022 Part D income-related adjustment amounts for beneficiaries with high incomes as outlined by CMS. These monthly adjustment amounts are deducted from beneficiaries’ Social Security checks.

Refer to the table below for a clearer understanding of the premiums for beneficiaries with high incomes and are married/living with their spouse during the taxable year, but wish to file a separate return, as outlined by CMS:

What does this mean for you and/or your loved ones?

Simply put, this mass increase in premium, coinsurance and deductible prices means that you can expect to pay more toward your Medicare coverage. Totaled out, you should prepare to spend around $14 thousand toward Medicare this year — at the very least. You can still expect to receive the same services you’ve been getting, or that you’ve signed up for. The only thing that will be changing is how much these services will add up to.

However, it’s completely understandable and justified to feel shaken as a result of this announcement. And at The Best Senior Services, we want to assure you that any questions you have will be answered. We provide trusted information to educate you and other seniors on Medicare and other financial services. Our resources are free, easily accessible, and available 24/7.

If you have any questions that remain unanswered, feel free to contact us so that we can connect you with a local agent in your area who can answer any questions or concerns that you have. You can get started with us today by visiting our website or by calling us at 855-979-8277.