2022 Medicare Premiums Post Big Increases
UPDATED DEC. 21
Medicare announced on November 12 that it would apply big rate hikes on Medicare premiums next year. The monthly Part B premium will rise by $21.60, or nearly 15 percent, to $170.10 from $148.50 this year.
This increase is more than double the projected $10 boost included in the annual report from Medicare program trustees that was released in August. Half of the increase, Medicare officials reportedly said, is for contingency planning tied to the possibility of large claims by users of Biogen’s Alzheimer’s drug, Aduhelm. Because this drug must be administered by licensed caregivers, it would be covered under Part B of Medicare as an outpatient service, not by Part D prescription drug plans.
To date, very few people have been using the medication, and its formal approval as a covered drug is still under review by Medicare. Critics maintain the drug’s benefits are unproven and that its approval by the U.S. Food & Drug Administration was premature, at best.
The Centers for Medicare & Medicaid services (CMS) explained its reasoning as follows:
“Depending on utilization, the potential costs for this course of treatment range from negligible to very significant. To ensure that Part B is able to pay claims in full and on time, the Part B financing must be sufficient to provide for a realistic high-cost scenario of Aduhelm coverage. The contingency margin has been increased to accommodate this risk.”
On Dec. 20, Aduhelm’s manufacturer, Biogen, said it would halve the drug’s annual price to $28,000. CMS has made no announcement about whether it would reduce the 2022 Part B premium in response; many Medicare organizations have urged it to do so.
The sting of higher premiums will be reduced by next year’s Social Security cost of living adjustment (COLA) of 5.9 percent — the largest in 40 years. From where I sit, the COLA provided Medicare with the cover it needed to boost what amounts to a rainy-day reserve, not only for Aduhelm expenses but also broadly higher health care costs.
Higher health care expenses will also be reflected in high patient charges for Part A and in the high-income surcharges paid on Part B and Part D premiums.
| Part A Deductible and Coinsurance Amounts | ||
| 2021 | 2022 | |
| Inpatient hospital deductible | $1,484 | $1,556 |
| Daily coinsurance for 61st-90th Day | $371 | $389 |
| Daily coinsurance for lifetime reserve days | $742 | $778 |
| Skilled Nursing Facility coinsurance | $185.50 | $194.50 |
Some people with insufficient Social Security work earnings must pay Part A premiums. “Individuals who had at least 30 quarters of coverage or were married to someone with at least 30 quarters of coverage may buy into Part A at a reduced monthly premium rate, which will be $274 in 2022, a $15 increase from 2021.” CMS said. “Certain uninsured aged individuals who have less than 30 quarters of coverage and certain individuals with disabilities who have exhausted other entitlement will pay the full premium, which will be $499 a month in 2022, a $28 increase from 2021.”
Medicare Part B Income-Related Monthly Adjustment Amounts
| 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 |
Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
| Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses, with modified adjusted gross income: | Income-related monthly adjustment amount | Total monthly premium amount |
| Less than or equal to $91,000 | $0.00 | $170.10 |
| Greater than $91,000 and less than $409,000 | 374.20 | 544.30 |
| Greater than or equal to $409,000 | 408.20 | 578.30 |
Medicare Part D Income-Related Monthly Adjustment Amounts
| 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 |
| Less than or equal to $91,000 | Less than or equal to $182,000 | $0.00 |
| Greater than $91,000 and less than or equal to $114,000 | Greater than $182,000 and less than or equal to $228,000 | 12.40 |
| Greater than $114,000 and less than or equal to $142,000 | Greater than $228,000 and less than or equal to $284,000 | 32.10 |
| Greater than $142,000 and less than or equal to $170,000 | Greater than $284,000 and less than or equal to $340,000 | 51.70 |
| Greater than $170,000 and less than $500,000 | Greater than $340,000 and less than $750,000 | 71.30 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | 77.90 |
Premiums for high-income beneficiaries who are married and lived with their spouse at any time during the taxable year, but file a separate return, are as follows:
| Beneficiaries who are married and lived with their spouses at any time during the year, but file separate tax returns from their spouses, with modified adjusted gross income: | Income-related monthly adjustment amount |
| Less than or equal to $91,000 | $0.00 |
| Greater than $91,000 and less than $409,000 | 71.30 |
| Greater than or equal to $409,000 | 77.90 |
