New in 2022: Medicare Premiums, Deductibles, and Social Security Benefits
We are quickly approaching the end of 2021! As many of you know, that means you’ll be seeing some changes to your Medicare premiums and your Social Security benefits. The CMS recently released the updates for 2022, so we wanted to take a moment to discuss those changes.
Social Security COLA
The Social Security COLA is the Cost-of-Living Adjustment that happens each year. For 2022, the Social Security Administration has announced a 5.9% increase to be applied to retirees’ monthly checks. More than 64 million Americans will see an average of a $70 increase in their benefits.
The SSA is also increasing the maximum earnings that are subject to the Social Security tax to $147,000. Individuals who are not full retirement age can earn up to $19,560, and those who are already at full retirement age have a limit of $51,960.
Medicare Part A in 2022
Most individuals won’t notice a premium in change for Part A since the majority of Medicare beneficiaries receive premium-free Part A. As long as you’ve paid Medicare taxes for ten years, you’ll have this benefit.
However, there are still some individuals who have to pay a Part A premium. The amount you pay is based on the number of quarters you paid Medicare taxes. If you paid Medicare taxes for more than 30 quarters, but less than 40 quarters, your premium will be $274 in 2022. If you did not reach the 30 quarter mark, you’d pay the full Part A premium of $499.
The Part A deductible is also increasing in 2022. In 2021, the deductible was $1484. That will increase to $1556 in 2022. It’s important to remember that this deductible applies per benefit period, not calendar year. It’s possible for individuals who get hospitalized more than once to have to pay this deductible multiple times in one year.
Medicare Part B in 2022
Unlike Part A, no Medicare beneficiary receives premium-free Part B. This past year, the standard premium was $148.50. In 2022, it will be increased to $170.10.
The thresholds for income limits have also been increased. While most people do pay the standard premium, high-income individuals or couples could pay more. You will pay the standard premium if you are an individual who makes $91,000 or less or you are part of a married couple who makes $182,000 or less.
After you’ve reached one of those limits, the monthly premium will go up to $238.10. The next increase applies to those who make $142,000/$284,000 – they will pay a monthly premium of $340.20. The adjustments continue to increase, maxing out at a monthly payment of $578.30.
For a full breakdown of the 2022 Medicare Costs and Premiums, visit https://medicarequick.com/2022Costs
The Part B deductible is also increasing from $203 in 2021 to $233 in 2022. Unlike the Part A deductible, this one does just apply annually.
Medicare Part C in 2022
There are no one-size-fits-all changes for Part C plans in 2022. Since these plans are offered by private insurance companies, their rates and deductibles will vary. The Annual Election Period (AEP) that occurs every year from October 15 – December 7 is the time that current Part C plan holders can find out what their benefits will look like in the upcoming year.
Medicare Part D in 2022
Like the Part C plans, there is no specific increase to these plans – it will be dependent on the insurance carrier. However, most plans utilize the standard deductible, which is also the maximum deductible that any plan is allowed to have. The Part D deductible is increasing from $445 to $480.
In addition to the deductible, the catastrophic threshold is also increasing. This number is what a beneficiary would have to pay out-of-pocket before reaching catastrophic coverage, during which a majority of prescription expenses are covered by the plan. (You’ll spend some time in the coverage gap or “donut hole” before reaching this coverage phase.)
The catastrophic threshold in 2022 is $7050, up from $6550 in 2021. This is a significant increase that could place a financial strain on individuals who take more expensive medications.
It is important it is to talk to your agent every year about your current plans. There are often cost-saving opportunities that could help offset the increased premiums of the parts of Medicare we can’t control. Give us a call to speak with a licensed agent at (866) 445-6683 (TTY 7-11 M-F 9 am to 5 pm) or drop us a message HERE, if you have any questions.
