Every year, Medicare announces a list of new updates to the insurance program. The updates might seem trivial and minor, but they can significantly impact enrollees’ finances and coverage.
Enrollees need to keep a close eye on the annual Medicare updates.
Historically, Medicare changes usually expand the program, but changes also involve the amount you pay in premiums, deductibles, and coinsurance – some go up, some go down.
So, what are the Medicare changes in 2022?
The Medicare changes in 2021 included:
- The standard Part B premium was $148.50 (a federal spending bill limited the increase).
- The Part B deductible was $203
- Part A premiums, deductible, and coinsurance were more expensive.
- Newly eligible Medicare beneficiaries can no longer purchase Medigap Plans C and F.
- The income brackets for high-income premium adjustments for Medicare Part B and D will start at $88,000 for a single person.
- High-income surcharges for Part D and Part B increased in 2021.
- Medicare Advantage enrollment will continue to rise.
- Medicare Advantage plans are open for those with ESRD.
- The maximum out-of-pocket limit for Medicare Advantage plans increased to $7,550.
- Part D donut hole no longer exists.
- A standard plan’s maximum deductible increased to $445. The threshold for entering the catastrophic coverage phase rose to $6,550.
The full scope of Medicare changes in 2022 has yet to be revealed, but below, you will find an up-to-date breakdown of the changes you can expect.
Medicare Part A Changes 2022
Medicare Part A is free coverage, often referred to as ‘hospital insurance. The plan provides coverage for inpatient care during hospital admittance, skilled nursing facilities, and home health care in specific scenarios.
When an individual turns 65, Medicare Part A eligibility is automatic. No premium is paid unless they have less than 40 quarters – equal to about ten years – of work history (1% of enrollees).
Although most Americans do not pay a premium for Part A, out-of-pocket costs must be paid when care is needed.
Part A Premiums in 2022
The Part A premium sees a slight change every year for those who do not have 40 quarters of work history. As usual, the premium will depend on how long they or their spouse has worked and paid Medicare taxes.
Currently, Part A premium for individuals with between 30 and 40 quarters of work history pays $252 per month, and for those with less than 30 quarters of work history, the premium is $458 per month.
The 2022 Part A premiums were not available at the time of writing, but enrollees can expect a slight increase in the 2021 amounts.
Part A Deductible in 2022
Part A deductible applies to each benefit period and can be necessary more than once per year. The deductible generally increases each year. In 2021, the deductible amount for Medicare Part A rose to $1,484, increasing $76 from $1,408 in 2020. This increase applies to all enrollees, although many may have supplemental coverage that pays for the cost.
In 2022, enrollees can expect a similar increase of around $40, but the confirmed 2022 Part A Deductible will be revealed in fall 2022.
Part A Coinsurance in 2022
Part A deductible only covers the first 60 inpatient days. Should additional inpatient coverage be required, patients will incur a daily coinsurance charge. For 2021 the daily coinsurance is $371 per day for the 61st through 90th day of inpatient care and $742 per day for lifetime reserve days (an additional 60 days).
When in a skilled nursing facility, the first 20 days are covered with the Part A deductible. Coinsurance that applies to days 21 through 100 is $185.50 per day in 2021.
Medicare Part B Changes for 2022
Unlike Medicare Part A, Medicare Part B requires a monthly premium – an amount that is automatically deducted from an individual’s benefit payment. In addition, Part B covers outpatient hospital services (X-rays, diagnostic tests, medical supplies), physician fees, certain home health services, and other medical services not covered by Part A.
In 2022, there were significant changes to both Part B premiums and deductibles. However, it has been suggested that Medicare beneficiaries will get a reprieve from high Part B costs in 2022 as the government looks to protect Medicare beneficiaries from pandemic-related economic troubles.
Part B Premiums in 2022
The standard Part B premium sees a natural change every January. The increase or decrease is often in accordance with the Social Security cost of living adjustment.
In 2021, the Social Security cost of living adjustment saw the average retiree’s total benefits increase, marking a manageable increase in Part B premium costs. The increase saw Medicare Part B premiums rise to $148.50 per month.
The 2022 Part B premium amount wasn’t available at the time of writing, but beneficiaries can expect it to remain similar.
Part B Deductible in 2022
The annual deductible for all Medicare Part B beneficiaries is $203 in 2021, increasing $3 from 2020. Once this deductible is met, enrollees typically pay 20% of covered services.
There’s no yearly limit on what you pay out-of-pocket. However, it’s worth bearing in mind that supplemental coverage is available to pay for Part B deductibles. This coverage includes Medicaid, employer-sponsored plans, and Medigap plans C and F.
Although the 2022 Part B deductible will be revealed in the fall, the predicted numbers increase is $212 in 2022.
Medicare Part D Changes 2022
Medicare Part D is a program introduced by the federal government to get Medicare beneficiaries prescription drug coverage. Part D plans are run by private insurance companies that follow the rules set by Medicare.
Even if you don’t currently take prescription drugs, you should consider getting Medicare drug coverage. If you decide to purchase the plan after you are first eligible, you may need to pay a late enrollment penalty.
Part D Premiums in 2022
Medicare Part D plans differ substantially from provider to provider. However, in 2021, the average basic monthly premium for Medicare Part D sat at $33.06. The Centers for Medicare & Medicaid Services estimate that the average basic Part D premium will increase slightly in 2022. Just like Medicare Part B premiums, higher earners will pay extra.
And while not every coverage requires deductible payments, in 2021, the maximum it can be is $445, up from $435. In addition, the catastrophic coverage phase threshold (where out-of-pocket costs drop significantly) has also risen to $6,550 from $6,350.
Part D Donut Hole Closed
The Medicare Part D donut hole remains closed in 2022. As a result, enrollees now only have to pay 25% for both brand and generic prescription drugs in the ‘coverage gap/donut hole’ until they reach the catastrophic coverage threshold ($6,550), in which case their Medicare prescription drug plan will pay for a large portion of their covered medications for the remainder of the year.
Adjusted Rates for High Income Brackets
It’s widely known that Medicare beneficiaries with high incomes pay higher premiums for Part B and Part D. And in 2021, the income brackets have been adjusted for inflation. The high-income threshold has been increased to $88,000, up from $87,000.
Those earning over $88,000 and less than or equal to $111,000 per year will now meet the first tier of additional Part B premium costs – where the price increases to $207.90.
Changes to Medicare Supplement Plans (Medigap) 2022
As of January 2020, Medigap Plan C and Plan F are no longer available for new Medicare enrollees. These two Medigap plans were popular because they covered Part B deductible costs in full. However, a person previously enrolled in Plan C or Plan F can keep the policy.
The reason congress banned the sale of Medigap Plan C and Plan F to new enrollees is because they believed that requiring all Medicare members to pay their part B deductible would reduce medical overuse.
What else is new for Medicare for 2022?
With the Medicare enrollment periods approaching, information regarding the 2022 changes has been released. In 2022, enrollees can expect significant changes to Medicare Advantage plans.
Expanded telehealth options for Medicare Advantage plans
Medicare Advantage plans will continue telehealth services and coverage. Telehealth allows seniors to be treated by medical professionals without leaving the safety of their homes.
Medicare Advantage plans will include telehealth providers in specific practice areas, including:
- Primary Care
Beneficiaries with end-stage renal disease can enroll.
In 2022, the 21st Century Cures Act will allow individuals with end-stage renal disease (ESRD) to choose a Medicare Advantage plan regardless of their previous coverage. Previously, individuals with ESRD could only enroll in Medicare Advantage plans under limited circumstances.
The 2022 Medicare changes will, in some situations, ease headaches, but in others, they’ll introduce extra challenges and expenses.
For expert advice relating to your unique situation, contact our advisors to discuss your requirements and find the best coverage plan for you.