MEDICARE

Is Medicare going up 2022?

CMS released the increase on Medicare standard premiums and deductibles for 2022 which was nearly three times the COLA for Social Security benefits.

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Is Medicare going up 2022?
PIROSCHKA VAN DE WOUW REUTERS

The Centers for Medicare & Medicaid Services (CMS) announced the new rates beneficiaries will pay on premiums, deductibles and coinsurance in 2022 for Medicare. Despite the standard premium for Medicare’s outpatient care coverage outpacing the 2022 COLA increase for Social Security benefits, the dollar amount of the former is less than the latter.

That will be of little comfort to those on a fixed income dealing with record inflation on food and fuel as a result of the aftermath of the covid-19 pandemic. Protecting beneficiaries from a large increase in 2021 due to the pandemic is part of the reason why the increase to Medicare Part B will be so high in 2022 but is also due to the need to maintain a contingency reserve for potential future increases in health care spending.

Increases to Medicare Part B

Although those on Medicare will be paying more across the board for care, most will feel the sting from the 14.5 percent increase to Medicare Part B monthly premiums and annual deductible. Medicare Part B coverage is for medical and health services, such as outpatient and home care, as well as durable medical equipment not covered under Medicare Part A. Over 90 percent of Medicare beneficiaries had Part B coverage in 2019.

Enrollees in Medicare Part B will see a $30 increase for 2022 in their annual deductible, jumping to $233, that beneficiaries will have to pay before coverage kicks in. The standard monthly premium will increase $21.60 to $170.10 for 2022.

The premiums beneficiaries pay are taken out of monthly Social Security payments with the majority paying the standard rate. In 2022, those payments will see the largest increase in 40 years which will rise on average $92 per month for those receiving Social Security retirement benefits.

However, individuals who have income over $91,000 and couples filinf jointly with $182,000 or more in annual income will have to pay income-related monthly adjustment amounts. This affects around seven percent of people with Medicare Part B.

What is behind the large increase to Medicare Part B costs?

The jump in monthly premiums comes after a year where premiums had only a $3 per month increase in 2021. This was due to congressional action taken in 2020 to keep premiums down in light of the covid-19 pandemic. However, that measure has now expired and the CMS must begin to pay back the difference.

The CMS explained that the rise in costs for Medicare Part B are also due to increased usage of the healthcare system and rising prices. As well the agency is preparing for an expected rise in the amount of care that will be necessary in the future, on top of the potential high cost to the system of a new Alzheimer’s disease treatment. The FDA recently approved Aduhelm, and the uncertainty surrounding whether and how Medicare will cover it and similar drugs has the agency creating additional contingency reserves. The CMS has begun a National Coverage Determination analysis that is still underway to make the determination.

Medicare Part A cost increases for 2022

Medicare Part A premiums are also increasing in 2022, but this will affect around one percent of beneficiaries who have less than 40 quarters of coverage. Those who have or were married to someone who had at least 30 quarters of coverage can buy into Part A at a reduced monthly premium rate of $274 in 2022. This is a 5.7 percent increase from 2021 of $15.

The full Medicare premium will rise by nearly five percent, or $28, to $499 a month in 2022. This will affect those with fewer than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement.

In 2022, beneficiaries who are admitted to hospital will pay $1,556 inpatient hospital deductible for their share of costs for the first 60 days under Medicare Part A. This is an increase of $72 from $1,484 in 2021. The coinsurance amount that beneficiaries must pay per day for the 61st through 90th day of a hospitalization will increase from $371 to $389 in 2022 in a benefit period. Lifetime reserve days will increase by $36 in 2022 to $778 per day.

Beneficiaries in 2022 must pay a daily coinsurance of $194.50 for days 21 through 100 of extended care services in skilled nursing facilities, an increase of $9 per day of care.

Medicare Part D cost increases

Around eight percent of Medicare Part D beneficiaries will pay the income-related monthly adjustment amount on top of the monthly premium. These individuals have incomes over $91,000, or $182,000 for couples that file joint tax returns. Below those amounts there is no premium.

Roughly a third of the Part D premium for these individuals is deducted from Social Security payments, depending on the plan a beneficiary chooses, the rest is paid directly to the plan.

The CMS provides a list of premiums and deductibles for beneficiaries to consult.