MEDICARE OPEN ENROLLMENT
Medicare Advantage Plans: eligibility and how much to pay in 2022
Medicare open enrollment is underway, and those sixty-five and older will have the opportunity to purchase a Part C Advantage Plan or Part D Drug Plan.
More than 62.2 million people over the age of sixty-five in the United States receive their healthcare through Medicare. Over the years the program has been expanded to cover additional services. If an individual is still working, they have some flexibility in the ‘Parts’ of Medicare they can opt of out.
There are four main ‘Parts’ of the program, some of which have mandatory enrollment, while others can be purchased to provide additional coverage.
There are three major 'Parts' of Medicare:
What are the various 'Parts' of Medicare
Some seniors elect to add additional coverage for things like vision and dental through a Part C or Medicare Advantage plan.
Eligibility and Medicare Part A
To qualify a person or their spouse must have worked for at least ten years in a job that required them to pay taxes into the Medicare system.
However, if the ten-year marker is not met, a premium of "$259 or $471 each month," was paid "in 2021 depending on how long they or their spouse worked and paid Medicare taxes." The updated premiums for 2022 have yet to be released by the Center for Medicare and Medicaid Services (CMS).
In most cases, the federal government recommends enrolling in Medicare Part A because most people pay no premiums.
Medicare Part B
The majority of Medicare beneficiaries paid a premium of $148.50 in 2021. This amount was deduced monthly from their social security checks. Similar to Part A, the 2022 premiums have not been released.
Medicare Part B Premiums 2021
|File individual tax return||File joint tax return||File married & separate tax return||Monthly Total|
|$88,000 or less||$176,000 or less||$88,000 or less||$148.50|
|$88,000 to $111,000||$176,000 to $222,000||N/A||$207.90|
|$111,000 to $138,000||$222,000 to $276,000||N/A||$297.00|
|$138,000 to $165,000||$276,000 to $330,000||N/A||$386.10|
|$165,000 to $500,000||$330,000 to $750,000||$88,000 and less than $412,000||$475,20|
|$500,000 and up||$750,000 and up||$412,000 and above||$504.90|
Some senior rights organizations like the Senior Citizens League (SCL) worry that with inflation hitting record highs, many social security recipients could see almost all of their 2022 COLA increase go towards the increased premium. A recent statement released by the organization noted that "an estimated 39 million Medicare beneficiaries spend up to 29 percent of their Social Security benefits on healthcare costs." The average beneficiary in 2021 received a social security payment of $1,543 each month, which means that around $447 are spent on their healthcare needs, leaving a little $1,000 to cover other costs.
Medicare Part C or Medicare Advantage
To supplement their Medicare coverage, around a third of enrollees purchase Medicare Advantage Plans which include dental, hearing and vision services.
The CMS has announced in September, that more Part C plans will be available to members next year, especially those with chronic illnesses. The CMS also reported that the average monthly premium in 2022 for a Medicare Advantage Plan will decrease from $21.22 to $19 per month.
Medicare Part D — Prescription Drugs
The CMS has also reported that the price of Part D plans, which are designed to keep the cost of prescription drugs down will increase to $33 in 2022 compared to $31.74 in 2021.
This comes as the Democrat-led reconciliation bill created provisions that would allow Medicare to negotiate drug prices with pharmaceutical companies. However, the fate of the bill is still uncertain and some have criticized the provisions as far too limited. For example, a press release put out by the White House said the provisions included in the bill would give Medicare the ability to "negotiate up to 10 drugs per year during 2023, with those prices taking effect in 2025, increasing to up to 20 drugs per year." However, the number of drugs taken by people on Medicare is in the thousands and it could take decades for the federal government to negotiate lower prices given these conditions.