Premiums and deductibles for folks with this traditional Medicare health insurance coverage are jumping for the new year, the federal government announced Nov. 12.
The rising costs include the following:
2022 Medicare Part B standard premium: $170.10 per month, increasing $21.60 from $148.50 in 2021. That’s compared with an increase of $3.90 per month one year prior. 2022 Medicare Part B deductible: $233 per year, increasing $30 from $203 in 2021. That’s compared with an increase of $5 one year prior.
2022 Medicare Part A inpatient hospital deductible: $1,556, an increase of $72 from $1,484 in 2021. That’s compared with an increase of $76 one year prior.
This means Medicare cost increases for 2022 will effectively reduce the 5.9% cost-of-living adjustment, or COLA, that increases retirees’ monthly Social Security benefit payments in the new year. For the average retiree, the 2022 COLA translates to an extra $92 a month.
It’s not uncommon for increases in Medicare premiums to eat up at least a chunk of an increase in the Social Security COLA. This stems in part from how these amounts are determined: Social Security COLAs are tied to inflation. In contrast, Medicare premiums are connected to the Medicare program’s per-person cost, which often outpaces inflation.
As we reported in “2 Things That Hurt Social Security’s Inflation Protection,” Social Security COLAs averaged 2.2% between 2000 and 2020, while annual increases in the Part B premium averaged 5.9% during the same period, according to the Center for Retirement Research at Boston College
What Medicare Parts A and B cover Medicare Part A covers the following types of care:
Inpatient hospital services Skilled nursing facility services Some home health care services About 99% of Medicare beneficiaries don’t have to pay a premium for their Part A coverage due to how long they worked and therefore had Medicare taxes withheld from their paychecks.
Medicare Part B covers the following types of care:
Physician services Outpatient hospital services Certain home health services Durable medical equipment Certain other medical and health services not covered by Part A Part B premiums are based on income. The standard monthly premium listed above applies to individuals who earn up to $91,000 and married couples who makeup to $182,000 and file a joint federal tax return.
Folks with higher incomes pay higher Part B premiums — which will be anywhere from $238.10 to $578.30 for 2022, depending on income and federal tax-filing status.
Retirees in front of their new home See Also: 10 Types of Retirement Income That Are Not Taxable Medicare Advantage and Part D premiums Original Medicare and Medicare Advantage are the two main types of Medicare.
Original Medicare is the traditional Medicare program offered directly by the federal government that includes Medicare Part A and Part B. Folks with Original Medicare also can buy a Medicare Part D plan, which covers prescription drugs, from a private insurance company.
Medicare Advantage plans are an all-in-one alternative to the traditional program offered by private insurance companies that contract with the federal government. Folks with Medicare Advantage generally cannot buy Part D plans, but most of these plans include prescription coverage.
Because private insurers offer Medicare Advantage and Part D plans, their costs, including any premiums and deductibles, vary by plan and insurer.
On average, though, Part D premiums for 2022 are expected to be $33 per month, up from $31.47 one year prior, according to the Centers for Medicare & Medicaid Services. This federal agency oversees the Medicare program. Medicare Advantage premiums for 2022 are expected to average $19 per month, down from $21.22.