Millions of seniors rely on Medicare for health coverage during retirement, but it’s not as accessible or inexpensive as one may think. Original Medicare does not cover dental care or eyesight exams and hearing aids, leaving them vulnerable to high healthcare bills – especially those who have all their coverage from Original Medicare and rely on social security benefits. 

For many seniors, Medicare is a significant strain on the budget. In fact, a recent study showed that 1 in 7 Medicare enrollees had to return to work to cover the costs. 

Unfortunately, in 2022 Medicare Part B premiums will increase by $21.60, the most significant dollar increase in the health insurance program’s history. (source)

The annual Part B deductible will increase by $30 in 2022 to $233, up from the $203 cost in 2021.

While CMS also reported Medicare Part A increases for 2022, $274 or $499 each month in 2022, however, it’s worth noting that most people with Medicare will not pay this premium. If you or your spouse paid Medicare taxes for a certain amount of time while working, you receive what is called “premium-free Part A.”

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Medicare Part B Premium Increase Explained 

The Centers for Medicare & Medicaid Services (CMS) credited much of the costs for Medicare Part B to:

  • COVID-19 care spending
  • conditions from Congress to pay back the decreased premium increases from 2021
  • the requirement to build reserves to cover unexpected increases in healthcare costs

The 2022 Part B total premiums for high-income beneficiaries are shown in the following table:

Beneficiaries who file individual tax returns with modified adjusted gross income: Beneficiaries who file joint tax returns with modified adjusted gross income: Income-related monthly adjustment amount Total monthly premium amount
Less than or equal to $91,000 Less than or equal to $182,000 $0.00 $170.10
Greater than $91,000 and less than or equal to $114,000 Greater than $182,000 and less than or equal to $228,000 68.00 238.10
Greater than $114,000 and less than or equal to $142,000 Greater than $228,000 and less than or equal to $284,000 170.10 340.20
Greater than $142,000 and less than or equal to $170,000 Greater than $284,000 and less than or equal to $340,000 272.20 442.30
Greater than $170,000 and less than $500,000 Greater than $340,000 and less than $750,000 374.20 544.30
Greater than or equal to $500,000 Greater than or equal to $750,000 408.20 578.30

(source)

 

CMS officials emphasized that even though the 14.5% Part B premium hike is quite overwhelming, the Social Security cost-of-living adjustment (COLA), which goes into effect in January 2022, should be considered. COLA has risen 5.9%, the largest in 30 years, estimated to average $92 per recipient. So, even with this steep Medicare Part B premium increase, most Social Security recipients whose premiums are deducted from their benefits will see a net increase in their monthly check. 

Like all things government-related, there was some finger pointing to the newly appointed President of the United States, Joe Biden. In mid-November, Florida Senator Rick Scott released a press release implying that the surge in inflation, reflected in higher prices for almost everything, was to blame, and Joe Biden was at the helm. 

“We need to be LOWERING health care and drug prices and strengthening this vital program for seniors and future generations, not crippling the system and leaving families to pay the cost.” The press release also quoted the senator saying, “slamming Biden’s inaction to address the inflation crisis he and Washington Democrats have created with reckless spending and socialist policies, which is expected to cause significant price increases on [senior] citizens and Medicare recipients.” 

Kaiser Health News (KHN) dug deeper into these claims alongside Politifact to conclude if inflation was to blame for this Medicare premium hike and determined it was “mostly false.” (source)

“This is so false that it is annoying,” Paul Ginsburg, a professor of health policy at the Sol Price School of Public Policy at the University of Southern California, explained to KHN, “the effect of the inflation spike so far on prices is zero because Medicare controls prices.”

Will The Cost of Medicare Part C Go Up? 

Because Medicare Advantage (Part C) plans are purchased through private health insurance providers, the adjustments aren’t as cut and dry as those within Original Medicare. The Centers for Medicare & Medicaid Services (CMS) estimates that the average monthly premium for Part C plans will decrease from $21.22 in 2021 to $19 in 2022. However, it’s best to check with your current provider to know the adjustments for your plan. 

What’s Next? 

The Build Better Act encompasses prescription drug reforms that can bring some much-needed relief for Medicare recipients. Many companies, most notably AARP, are calling for quick action to pass these reforms. 

While we wait for this to pass in the Senate, speak with one of our Medicare representatives. They can walk you through your current needs and see if you qualify for a Special Enrollment Period to find a new provider that can make a difference for both your health coverage and your wallet.

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