Everything is getting more expensive and that includes Medicare.
AP News says the consumer price index, which is used to measure changes in prices, has increased by 6.2% from a year ago. That’s biggest surge in prices since 1990. Cost-of-living adjustments for Social Security benefits are tied to the consumer index, and seniors are getting a 5.9% raise in 2022.
Unfortunately, they may not be able to pocket all the extra funds because Medicare costs are going up as well. Many Medicare beneficiaries have their Medicare premiums deducted from the Social Security payments automatically, so Medicare price hikes can cancel out Social Security raises. The hold harmless provision means that seniors won’t see their checks go down, but it’s possible to break even.
This is vital information for agents and their Medicare clients. We summarized the price increase in our recent roundup of six important industry news updates. You can also go to the CMS Fact Sheet for information on the cost increases and charts for the income-related monthly adjustment amounts.
Medicare Part A Price Hikes
The full monthly premium for Medicare Part A is increasing $28 and will be $499 in 2022. Most Medicare enrollees qualify for premium-free Medicare Part A, so they won’t pay this, but they still need to pay deductibles and coinsurance. These out-of-pocket costs are also increasing in 2022.
- The inpatient deductible is going from $1,484 in 2021 to $1,556 in 2022.
- The daily coinsurance for the 61st to 90th day is going from $371 in 2021 to $389 in 2022.
- The daily coinsurance for lifetime reserve days is going from $742 in 2021 to $778 in 2022.
- The skilled nursing facility coinsurance is going from $185.50 in 2021 to $194.50 in 2022.
Medicare Part B Price Hikes
Medicare enrollees will also be paying more for Medicare Part B. In fact, they’ll be paying quite a bit more. The price hike is more than many people were expecting, and it might come as a rude shock for some Medicare enrollees.
- The deductible is going from $203 in 2021 to $233 in 2022.
- The standard premium is going from $148.50 in 2021 to $170.10 in 2022.
- In 2022, beneficiaries with an adjusted gross income of $91,000 or more on an individual tax return or $182,000 or more on a joint tax return will be subject to higher premiums. CMS says this affects about 7% of enrollees.
Medicare Part C (Medicare Advantage) Price Changes
The average Medicare Advantage premium is expected to decrease in 2022. CMS says that the average monthly premium will be $19 in 2022, down from $21.22 in 2021.
Medicare Advantage premiums can be extremely low and some plans offer $0 premiums. However, people who enroll in a Medicare Advantage also pay the Medicare Part B premium, so they need to budget for the Part B cost increases.
Medicare Part D Price Increases
CMS says that the average Medicare Part D monthly premium is expected to increase from $31.47 in 2021 to $33 in 2022.
Medicare Part D enrollees are also subject to income-related month adjustments. In 2022, beneficiaries with an adjusted gross income of $91,000 or more on an individual tax return or $182,000 or more on a joint tax return will be subject an additional charge of at least $12.40. Individuals in the highest income bracket will pay an additional $77.90 per month.
Helping Your Clients Budget
Many seniors live on tight budgets, so these increases could have a significant impact on their finances. Don’t let these price hikes take them by surprise. Help them understand how much they will be paying in additional premium costs, as well as deductible and coinsurance increase.