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Here’s What You Need to Know About 2022 Medicare Costs

It’s a new year and that means the onset of 2022 Medicare premiums, copays, deductibles, and coinsurance. Each year brings cost adjustments to Medicare and 2022 is no exception. Even small increases to costs - especially when combined with the inflation we’re experiencing - can affect seniors on fixed incomes. Take this time to make sure your Medicare expenses are still working within your budget and ask for help applying for programs that can reduce your expenses. Your Medicare agent is here to help!

Here’s What You Need to Know About 2022 Medicare Costs

1. Your income can affect your Medicare expenses

Something to keep in mind is that Medicare beneficiaries with high incomes will pay more for some parts of their health coverage, while low-income, low-resource beneficiaries may qualify for Medicaid or other programs such as Extra Help that can reduce out-of-pocket costs.

2. Your coverage choices will affect your Medicare expenses

When it comes to Medicare insurance, there are lots of options to choose from. The out-of-pocket costs you pay in 2022 will be directly tied to the coverage choices you made when you signed up for Medicare or the plan(s) you switched to during the 2022 Annual Enrollment Period.

3. How often you need health care will affect your Medicare expenses

It may go without saying, but seniors who rarely use the health care system will pay less for certain out-of-pocket costs such as copays and coinsurance. On the other hand, once someone meets their annual deductible, services received after that within the calendar year may be covered at a higher rate.

4. Part A cost increases

While there are cost-sharing parts to Medicare Part A, most seniors qualify for premium-free Part A (hospital insurance). Seniors who do not qualify for premium-free Part A will pay as much as $499 a month this year (up from $471 in 2021), depending on whether you paid any taxes into the Medicare system at all.

  • The deductible for each benefit period has gone up from $1,484 in 2021 to $1,556 this year.

  • Hospital admissions between 0-60 days: $0 coinsurance for each benefit period (no change).

  • Hospital admissions between 61-90 days: coinsurance per day of each benefit period has gone up from $371 in 2021 to $389 this year.

  • Hospital admissions for day 91 and beyond: coinsurance per each "lifetime reserve day" has gone up from $742 in 2021 to $778 this year (up to 60 days over your lifetime).

  • Beyond lifetime reserve days patients pay all costs (no change).

5. Part B cost increases

Part B benefits (medical/outpatient insurance) come with both monthly premiums and other out-of-pocket expenses. The Part B premium increased from $148.50 in 2021 to $170.10 in 2022. This is the largest ever Part B annual premium increase.

Note: some kupuna will not pay the full standard premium because of the “hold harmless” provision that stops their Part B premiums from increasing more than their Social Security cost-of-living adjustment, or COLA. Others will pay more than the standard premium because they fall into the high- income category based on their 2020 income tax return. If your income has been reduced since 2020 because of retirement or other life changes, you can request a reduction in your Part B premiums. Contact the Social Security Administration or your Medicare agent for the appropriate form.

  • The annual deductible has gone up from $203 in 2021 to $233 in 2022.

  • After the deductible is met, beneficiaries typically pay 20% of the cost of covered services unless they receive their benefits through a Medicare Advantage Plan or have a Medicare supplement plan that offsets the cost of coinsurance.

6. Changes to Medicare Advantage Plan costs

One of the great things about receiving your Medicare benefits through an Advantage Plan is that they come with an annual out-of-pocket maximum. The maximum out-of-pocket limit for Advantage Plans in 2022 is $7,550 for in-network services and $11,300 for in-network and out-of-network services combined. There is no change over 2021.

The average cost of a Medicare Advantage monthly premium in 2022 is $19, down from $21 in 2021.

7. Part D cost increases

Part D (prescription drug benefits) have copays and some plans come with a monthly premium and/or a deductible. The average cost of a Part D monthly premium in 2022 is $33, up from $31.47 in 2021. High-income earners pay more. The maximum deductible for 2022 Part D coverage is $480, up from $445 in 2021.

There is no out-of-pocket cap for Part D coverage and the amount that beneficiaries pay out-of-pocket before qualifying for “catastrophic coverage” has increased to $7,050 in 2022, up from $6,550 last year.

Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.

At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.

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