If you are at least 65 and aren’t covered by an employer health insurance plan, then you will probably need to enroll in Medicare.
Every year, there are copays, deductibles, and premiums to be paid. These numbers usually rise slightly each year, so you don’t have to be caught unprepared when they increase this year in 2022.
Part of the increases for this year have been at least somewhat offset by the large COLA jump in Social Security (the largest increase since the 1980s). Here are the critical numbers that are important to know regarding Medicare benefits in 2022.
Medicare Part A Premiums
Original Medicare consists of Medicare Parts A and B. If you paid payroll taxes on your lifetime wages for less than 30 quarters, then you must pay the premium for Medicare Part A.
This premium has risen to $499 per month in 2022, up $28 per month from the $471 that was charged last year. If you paid payroll tax for anywhere from 30 to 39 quarters, then your monthly premium will rise to $274 per month. That is an increase of $15 per month from $259 per month in 2021.
Medicare Part A Deductibles and Coinsurance
The inpatient hospital deductible has risen to $1,556 per benefit period in 2022. That comes out to $72 more than the $1,484 per month charged in 2021.
As for coinsurance, there is still a $0 copay for hospital stays of up to 60 days. For days 61 through 90, you will have to pay coinsurance of $389, an $18 hike from 2021’s price of $371 per day.
After 90 days, the daily coinsurance amount rises to $778 per day, up $36 per day from 2021’s price of $742 per day. Each Medicare participant gets 60 lifetime reserve days over the span of their life.
Copays for skilled nursing care is still $0 for the first 20 days. Then the price rises to $194.50 per day for days 21-100 of each benefit period, an increase of $9 per day from 2021’s cost of $185.50.
Medicare Part B Premiums and Deductibles
Medicare Part B has seen one of the largest jumps in cost from one year to another.
In 2022, this premium will cost $170.10 per month, which is a hike of $21.60 per month over the $148.50 per month charged in 2021. But these numbers only apply to single or head of household filers who have incomes of less than $91,000, or joint filers with incomes of less than $182,000.
Those with incomes above these thresholds must pay at least $68 per month more in 2022. People with super-high incomes can pay as much as $408.20 more per month in 2022.
This is on top of the standard Part B premium of $170.10. So, a high-income earner might have to pay a total of $578.30 per month ($408.20 + $170.10).
The deductible for Medicare Part B is also seeing a substantial increase of $30 per month in 2022 for a total of $233 per month compared to $203 per month in 2021.
Medicare Part D Premiums and Copays
Part D of Medicare has seen a much less severe increase in price from 2021 to 2022.
In 2021, the average Medicare Part D premium was $31.47 per month. Now, the average premium in 2022 is $33 per month.
What about folks with incomes above the thresholds, as discussed before? They will have to pay anywhere from an additional $12.40 per month to $77.90 per month on top of their standard Part D premiums.
Medicare Advantage Plan Ratings
Medicare Advantage plans are covered in what is also known as Medicare Part C.
They are bundled plans that encompass everything covered by Original Medicare and usually also Part D. They also often contain other ancillary benefits such as coverage for dental, hearing, and vision care, fitness memberships, stipends for over-the-counter expenses, and meal delivery.
Every year, the Centers for Medicare and Medicaid Services assigns a star rating to these plans. One star is the lowest and five stars are the highest.
These ratings can change from one year to the next. They are based primarily on the customer satisfaction feedback that they receive, along with the overall quality of the services and care that each plan provides.
In 2022, the average rating for these plans came in at 4.37. The average rating was 4.06 in 2021.
Sixty-eight percent of the plans that include drug coverage received a star rating of 4 stars or higher in 2022. Comparatively, only 49% of such plans carried this distinction in 2021.
Medicare Advantage Premiums
This is one area where the price actually dropped from last year until this year. In 2021, the average Medicare Part C premium was $21.22 per month. The 2022 premium has dropped to $19 per month.
Of course, Medicare Advantage enrollees must also still pay the Part B premium of $170.10 per month in addition to their Part C premiums.
The number of people expected to enroll in an Advantage plan in 2022 stands at 29.5 million, up from the 26.9 million that enrolled in 2021.
There are a total of 3,834 Medicare Part C Plans being offered in 2022, which is an 8% increase from 2021. Of these plans, nearly 60% are structured as HMOs. On the other hand, only 37% of plans are designed as PPOs.
Making Changes to Medicare
If you want to change your Medicare plan from Parts A and B to Part C, find another Medicare Advantage Plan or pick up Part D coverage, you can do this during Open Enrollment, which lasts from October 15TH to December 7th.
If you realize that you enrolled in the wrong plan, then there is a Medicare Advantage enrollment period from January 1 to March 31st. During this period, you can switch to another Medicare Advantage plan or switch back to Parts A and B with the option to pick up Part D coverage.
Your new coverage will start at the beginning of the month, after the month in which you requested your change.
Some Final Thoughts to These Important Medicare Updates
There are changes to the premiums, deductibles, and copays with Medicare every year. Some changes are larger than others on an annual basis.
If you have any questions about these numbers or other aspects of Medicare that might impact you, contact your agent or financial professional for more information.