Medicare Costs for 2022: What You Should Know
Key Takeaways
The Medicare Part B monthly premium for 2022 is $170.10, and the Part B annual deductible for 2022 is $233 — both historic increases.
The higher costs are somewhat offset by a historic increase in Social Security benefits.
Costs related to Medicare Part A are on the rise as well — although the large majority of people don’t pay a Part A premium.
The lowest cost or most coverage may not always be the best option for you.
Medicare Part B Premium for 2022
The Medicare Part B monthly premium is rising to historic levels for 2022.
The Part B premium for 2022 is $170.10 a month, a 14.5% increase from 2021. The $21.60 monthly increase comes after the premium increased a total of $14.50 from 2017 to 2021.
For Medicare beneficiaries who draw Social Security, the historic rate increase does coincide with a historic increase in their Social Security benefits. The Social Security Administration recently announced a 5.9% Cost-of-Living Adjustment for 2022, the largest benefit increase since 1983. The increase means that seniors who are drawing full Social Security benefits and pay their Part B premium through their Social Security checks will actually net more money each month in 2022.
The Centers for Medicare & Medicaid Services (CMS) also announced increases in the Part B deductible and the Part A premium and deductible.
Why is the Part B premium increasing in 2022?
Medicare Part B, which provides medical insurance for millions of Americans, features a standard monthly premium every year.
In announcing the Part B premium increase for 2022, CMS shared three reasons for the rising premium:
- Rising costs and utilization across the healthcare system, as well as anticipated increases in “the intensity of care provided.”
- Congressional action that limited the Part B premium increase in 2021 to $3.90, suggesting that the increase would have been greater in 2021 and therefore flatter in 2022 without Congress stepping in to help during a difficult year dominated by the COVID-19 pandemic.
- Concerns that an Alzheimer’s drug (Aduhelm) that may be covered by Medicare in 2022 will result in “significantly higher expenditures for the Medicare program.”
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Medicare Part B Deductible for 2022
CMS noted the same reasons for a rise in the Part B deductible from $203 in 2021 to $233 in 2022. The $30 annual increase comes after the deductible increased a total of $20 from 2017 to 2021.
How do Part B premiums and deductibles work?
If you are enrolled in Part B of Original Medicare, you are responsible for paying a premium each month that keeps your coverage active.
Your deductible is the amount you pay before your insurance policy will cover its portion of your medical bills. So when you use your Part B coverage by visiting a doctor or purchasing durable medical equipment for example, you typically are responsible for the costs out of pocket until you meet your deductible. After that, you still may be responsible for copays or coinsurance for covered services, but Part B will cover 80% of costs for most services.
Medicare Part A Costs for 2022
Ninety-nine percent of people don’t have to pay a monthly premium for Medicare Part A, commonly referred to as “hospital insurance.” But if you do receive treatment in a hospital or other approved facility, you are responsible for some costs.
- For 2022, the inpatient hospital deductible is $1,556, an increase from $1,484 in 2021. After you pay the benefit period deductible, your Medicare-approved inpatient care for the first 60 days costs you nothing.
- For Days 61-90, you are responsible for $389 of daily coinsurance, up from $371 in 2021.
- For lifetime reserve days (up to 60 days of coverage that you get after Day 90), you pay $778 coinsurance per day used — up from $742 in 2021.
- For approved stays in a skilled nursing facility, Medicare Part A doesn’t require you to pay a deductible or coinsurance for the first 20 days. You pay $194.50 coinsurance for Days 21-100, up from $185.50 in 2021.
Medicare Part A premium for 2022
One percent of Medicare beneficiaries are responsible for the Medicare Part A monthly premium because they (or a qualifying spouse) haven’t paid Medicare employment taxes for 10 or more years (40 or more quarters).
- Individuals who have logged fewer than 30 quarters are responsible for a monthly premium of $499 in 2022, a $28 increase from 2021.
- Individuals who have logged at least 30 quarters but fewer than 40 are responsible for a monthly premium of $274 in 2022, a $15 increase from 2021.
Are you eligible for cost-saving Medicare subsidies?
Income Related Adjustments for Part B, Part D
Part B has a standard premium that is set each year, and Part D prescription drug plans have a premium that varies from plan to plan.
But on top of those premiums, higher earners are required to pay higher premiums.
CMS estimates that 7% of Medicare beneficiaries are impacted by the following Income Related Monthly Adjusted Amounts (IRMAA), which are based on your 2020 modified adjusted gross income.
Part B IRMAA rates for 2022
- Individual: Up to $91,000
- Joint: Up to $182,000
- Cost added to standard premium: $0
- Individual: $91,001-$114,000
- Joint: $182,001-$228,000
- Cost added to standard premium: $68
- Individual: $114,001-$142,000
- Joint: $228,001-$284,000
- Cost added to standard premium: $170.10
- Individual: $142,001-$170,000
- Joint: $284,001-$340,000
- Cost added to standard premium: $272.20
- Individual: $170,001-$500,000
- Joint: $340,001-$750,000
- Cost added to standard premium: $374.20
- Individual: $500,001 and above
- Joint: $750,001 and above
- Cost added to standard premium: $408.20
If you were married and lived with your spouse during the tax year but filed a separate return, your Part B IRMAA is as follows.
Annual income up to $91,000
- IRMAA: $0
Annual income from $91,001-$409,000
- IRMAA: $374.20
Annual income greater than $409,000
- IRMAA: $408.20
Part D IRMAA rates for 2022
- Individual: Up to $91,000
- Joint: Up to $182,000
- Cost added to standard premium: $0
- Individual: $91,001-$114,000
- Joint: $182,001-$228,000
- Cost added to standard premium: $12.40
- Individual: $114,001-$142,000
- Joint: $228,001-$284,000
- Cost added to standard premium: $32.10
- Individual: $142,001-$170,000
- Joint: $284,001-$340,000
- Cost added to standard premium: $51.70
- Individual: $170,001-$500,000
- Joint: $340,001-$750,000
- Cost added to standard premium: $71.30
- Individual: $500,001 and above
- Joint: $750,001 and above
- Cost added to standard premium: $77.90
If you were married and lived with your spouse during the tax year but filed a separate return, your Part D IRMAA is as follows.
Annual income up to $91,000
- IRMAA: $0
Annual income from $91,001-$409,000
- IRMAA: $71.30
Annual income greater than $409,000
- IRMAA: $77.90
What it Means for You
You now have a lot of information at your fingertips about 2022 Medicare costs, but what do you do with it? Parts A and B coverage is the cornerstone of Original Medicare. Parts A and B coverage also is at the heart of Medicare Advantage, an alternative to Original Medicare offered by private insurance companies that includes Parts A and B coverage but offers additional benefits and potential savings.
Original Medicare
- If you have a qualifying work history, your Part A benefits don’t come with a monthly premium.
- Your Medicare Part B premium is set each year by the federal government and income brackets determine if you pay a standard rate or more.
- There is no limit on what you pay out of pocket each year. You will always be responsible for 20% of expensive treatments or surgery. These services can be costly.
- Original Medicare usually costs more than Medicare Advantage but can make budgeting your healthcare costs easier by offering predictable pricing for services.
- Original Medicare does not have the protection of out-of-pocket limits.
Medicare Advantage
- Your Part A and Part B coverage are always the same but networks, copays, and Rx options can change from plan to plan. You must still pay your Part B premium if you switch to Medicare Advantage.
- Insurance companies are paid by the federal government to administer Medicare Advantage plans and each company determines their plans costs.
- Roughly half of all Medicare Advantage plans offer a Part D plan without an additional deductible.
- Medicare Advantage offers maximum out-of-pocket limits, so any covered services after reaching MOOP cost nothing for the remainder of the calendar year.
What extra benefits and savings do you qualify for?
Many Different Kinds of Costs: Make the Comparison
We have and will mention throughout, don’t accept face value. Just because a plan is expensive, doesn’t not make it right for you. Every Medicare plan provides different options for services, including prescription drug prices, provider networks, vision and dental, and more.
Getting coverage that matches your health needs is paramount. Next, you can look at additional coverage and plan flexibility — both vary and come with different costs.
We’ve taken common scenarios for all four parts of Medicare and identified how they compare.
Original Medicare
Most people who choose Original Medicare plus a Medigap plan value access to Medicare’s entire network. Medicare’s network offers flexibility.
- Higher Cost
- Coverage & Flexibility
Original Medicare and Medigap have predictable costs. Beneficiaries want the peace of mind that comes from knowing exactly how much they will spend on a hospital stay or chronic illness. They buy for convenience and don’t mind spending a bit more to gain peace of mind.
- Higher Cost
- Coverage & Flexibility
Sometimes people also choose Original Medicare if their doctors do not participate in any Medicare Advantage plans.
- Higher Cost
- Coverage & Flexibility
Medicare Advantage
Medicare pays the insurance company to administer your Part A and B benefits through the Medicare Advantage plan.
- Affordable Cost
- Good Coverage
Most Medicare Advantage Plans have a Part D option included.
- Affordable Cost
- Coverage & Flexibility
Medicare Advantage offers a lower monthly premium, and you get great coverage if your doctors and hospital are in network.
- Affordable Cost
- Good Coverage
Medicare Advantage plans may offer additional services, like dental and vision, wellness programs, transportation, and more.
- Affordable Cost
- Coverage & Flexibility
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Original Medicare & Part D
Enrollees can see any provider that accepts Medicare.
- Higher Cost
- Coverage & Flexibility
Costs for Parts A, B, and D can be significant.
- Higher Cost
- Coverage & Flexibility
Without Medigap, there’s no Part A and B out-of-pocket limit.
- Higher Cost
- Good Coverage
Original Medicare, Part D & Medigap
Depending on the Medigap plan, Parts A and B deductibles, coinsurance, and copays may be covered in full.
- Affordable Cost
- Coverage & Flexibility
The total cost for Parts A, B, D, and Medigap could be more expensive than Medicare Advantage.
- Higher Cost
- Coverage & Flexibility
Medigap does not help pay Part D drug costs, so they can be higher than a Medicare Advantage plan.
- Higher Cost
- Coverage & Flexibility
Premium payments will be lower without Medigap, but out-of-pocket costs may be higher without additional coverage.
- Affordable Cost
- Coverage & Flexibility
Get the health benefits and savings you’re entitled to.
Make the Right Choice by Comparison
Making an important choice like what health insurance plan to purchase is huge! There are so many details, and there are licensed insurance agents, like GoHealth, that can help you wade through those waters. But if you choose to comparison-shop on your own, consider these four topics over anything else.
Total cost for care
It’s important to think about your total out-of-pocket costs, including deductibles, copayments, coinsurance, maximums, and drug costs, that you’ll pay with a Medicare health or drug plan.
Provider
Some plan types have a network of providers you’ll have to use if you want to pay less. If you have a particular doctor or pharmacy that you prefer to go to, see if that plan has a network.
What benefits do you Need?
Many Medicare Advantage Plans include prescription drug, vision, hearing, and dental coverage.
Overall “Star Rating”
The “Overall Star Rating” gives a rating of the plan’s quality and performance for the types of services each plan offers. A plan can get a rating between 1 and 5 stars.
FAQs
Most people supplement Medicare with some other form of coverage, such as a Medigap plan, retiree plan, Medi-Cal (if they have low income and assets), or Veterans Affairs (VA) benefits (if they qualify).
Others receive Medicare through private health plans called Medicare Advantage (MA) plans. MA plans have lower premiums with provider networks, but usually cover Part D and some include vision, dental and hearing. If your providers are in a Medicare Advantage network, it’s a great option.
If you are covered by an employer group health plan through active employment (i.e., not a retiree plan), you may delay enrolling in Part B. Still, it might be worth a comparison to find out if Medicare offers better coverage or costs less than your employer group plan. If you do delay enrolling in Part B, you can enroll anytime without penalty as long as you have credible health insurance with an employer. When your employer insurance stops, you will get a Special Enrollment Period that allows you to enroll in Part B without late penalties.
Each year, there’s an open enrollment period for Original Medicare, Medicare Advantage and Medicare Part D, which runs from October 15 to December 7, with coverage changes effective on January 1.
There’s also a separate open enrollment window for Medicare Advantage and Part D that allows you to switch plans. This window runs from January 1 to March 31. If you’re new to medicare and miss your Initial Enrollment Period, you can enroll in Medicare during this window, with coverage changes effective on July 1.
