On Friday, November 12, the Centers for Medicare & Medicaid Services (CMS) released the 2022 costs of Original Medicare, which is made up of Parts A and B. With the Medicare program’s Annual Enrollment Period (AEP) already underway, this announcement allows Medicare insurance beneficiaries or prospective enrollees to know their options and decide which Medicare insurance solution fits their needs best.
During AEP, beneficiaries can choose from Original Medicare, Medicare Advantage, a Medicare Part D drug plan, or a Medicare Supplement. Depending on your needs, you can combine some of these Medicare insurance coverage options (i.e., Original Medicare with a Medicare Supplement and prescription drug plan), so understanding the costs associated with each is essential.
While Original Medicare saw an increase across the board, this is taking into account a historic Cost of Living Adjustment (COLA) of 5.9 percent. This COLA is larger than the earlier predictions of 4.7 percent, which would have made it the largest since 2009. Though it’s smaller than the later predictions of 6.2 percent, a COLA of 5.9 percent will have Social Security beneficiaries still experiencing the largest COLA since 1982.
CMS already released its general predictions for 2022 costs of Medicare Advantage and Part D plans earlier in October. These were only averaged estimates, since plans are offered by private carriers and can vary on prices from plan to plan. Now, we know more about the options to choose from this AEP, Medicare Part B costs in relation to the COLA, and more.
Medicare Part A
When it comes to the costs you can expect for Medicare Part A each year, there are only a few key costs to watch for. That’s because nearly every Medicare insurance beneficiary receives Medicare Part A coverage premium-free. You can qualify for premium-free Medicare Part A if you or your spouse pay the Medicare tax for 40 quarters or 10 years. This tax is taken out of your paycheck, so most people pay into it without even knowing.
If you don’t qualify for premium-free Part A, you’ll owe a monthly premium, though how much of a premium you owe depends on how many quarters you paid the Medicare tax. In 2022, the full premium will cost $499, an increase of $28 from the $471 premium of 2021. If you or your spouse has paid into Medicare insurance for 30 quarters or more, without reaching 40 quarters, you’ll pay the partial premium. This partial premium increased $15 from last year’s $259 to $274 each month in 2022.
Outside of the premium, there are a few other costs that you’ll owe for Medicare Part A. Generally, these are the deductibles and coinsurances for different types of inpatient facilities and care. For example, the 2022 inpatient hospital deductible is set at $1,556, a $72 increase from the $1,484 in 2021. The daily coinsurance for days 61 to 90 in inpatient care will increase from $371 to $389 each day. After the 90th day of care, you begin using your lifetime reserve days, the daily coinsurance of which is increasing from $742 in 2021 to $778 in 2022. Finally, if you require skilled nursing facility care, you’ll pay a daily coinsurance of $194.50 for days 21 to 100 of coverage.
2022 Part A Cost Breakdown
| Type of Cost | 2021 | 2022 | % |
|---|---|---|---|
| Full Part A Premium | $471 | $499 | 5.94% |
| Partial Part A Premium | $259 | $274 | 5.79% |
| Inpatient Hospital Deductible | $1,484 | $1,556 | 4.85% |
| Daily Coinsurance for Days 61 to 90 | $371 | $389 | 4.85% |
| Daily Coinsurance for Lifetime Reserve Days | $742 | $778 | 4.85% |
| Skilled Nursing Facility Coinsurance | $185.50 | $194.50 | 4.85% |
Medicare Part B
Medicare Part B has a greater variety of costs compared to Medicare Part A. Chief among many beneficiaries’ interests is the Part B monthly premium, which is $170.10 in 2022 unless you are held harmless. If your premium comes directly out of your Social Security check each month, the increase in Part B premiums cannot be greater than your COLA. If this is the case for you, you’re considered held harmless and pay a smaller monthly premium.
This isn’t the only way your Part B premium may change each year, meaning it can be different from others’ Part B premiums. If your income is over a certain amount, you may also pay more than the standard premium. This is called the Income-Related Monthly Adjustment Amount (IRMAA).
Most seniors will see little to no difference based on their income, since individuals need to make over $91,000 annually and couples have to make over $182,000 annually to receive the IRMAA, both amounts which are above the median annual income for seniors. There is also an adjustment to the Medicare Part B deductible in 2022. It will increase $30 to $233.
2022 Part B Cost Breakdown
| Type of Cost | 2021 | 2022 | % |
|---|---|---|---|
| Standard Part B Premium | $148.50 | $170.10 | 14.55% |
| Part B Deductible | $203 | $233 | 14.78% |
| File Individual Tax Return | File Joint Tax Return | Monthly Adjustment | 2022 Part B Monthly Premium |
|---|---|---|---|
| $91,000 or Less | $182,000 or Less | $0.00 | $170.10 |
| $91,001 to $114,000 | $182,001 to $228,000 | $68.00 | $238.10 |
| $114,001 to $142,000 | $228,001 to $284,000 | $170.10 | $340.20 |
| $142,001 to $170,000 | $284,001 to $340,000 | $272.20 | $442.30 |
| $170,001 to $499,999 | $340,001 to $749,999 | $374.20 | $544.30 |
| $500,000 or More | $750,000 or More | $408.20 | $578.30 |
| File Separate Tax Return from Spouse | Monthly Adjustment | 2022 Part B Monthly Premium |
|---|---|---|
| $91,000 or Less | $0.00 | $170.10 |
| $91,001 to $408,999 | $374.20 | $544.30 |
| $409,000 or More | $408.20 | $578.30 |
What About Medicare Part C and D?
As mentioned earlier, Medicare Part C, also known as Medicare Advantage, and Part D, prescription drug plans (PDPs), don’t have set costs. The specifics vary from plan to plan since they are offered by private insurance companies. Despite this, these plans are approved by the federal government.
Luckily, CMS estimates a decrease on average premiums for Medicare Advantage and a small increase for Part D premiums in 2022. Remember, these costs will differ among plans. You can compare the costs of different plans instantly with Shop & Enroll’s Plan Finder tool. This tool will help you view the prices and benefit differences of plans near you, so you can select the right one to fit your needs.
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Each year, Medicare insurance beneficiaries and people enrolling for the first time will have a lot of options thrown their way. Knowing the key figures and costs can go a long way toward helping you decide which Medicare insurance option(s) to choose. Having the 2022 costs for Original Medicare can give you a stronger understanding of one of the most popular options for Medicare insurance coverage and the costs associated with it. You can feel confident knowing you have all the information necessary to make a well-informed decision, no matter which option you choose.
Sometimes, it’s good to have some guidance when choosing a Medicare insurance plan. If you want help with your Medicare insurance coverage search, check out Shop & Enroll, where we have a team of professionals to help you, as well as trusted licensed insurance agents to guide you through the process.
All Medicare insurance numbers were drawn directly from the CMS 2022 Medicare Parts A & B Premiums and Deductibles Fact Sheet. Should you have any questions, please refer back to the fact sheet. For reference, prices and costs for 2021 are available here.
