Today, the Centers for Medicare & Medicaid Services (CMS) released the 2022 Medicare Parts A and B premiums, deductibles, and coinsurance amounts, and the 2022 Part D income-related monthly adjustment amounts. Most people with Medicare will see a 5.9 percent cost-of-living adjustment (COLA) in their 2022 Social Security benefits—the largest COLA in 30 years. This significant COLA increase will more than cover the increase in the Medicare Part B monthly premium.Medicare Part B Income-Related Monthly Adjustment Amounts (IRMAA)
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. The increase in the standard monthly premium—from $148.50 in 2021 to $170.10 in 2022—is based in part on the statutory requirement to prepare for expenses, such as spending trends driven by COVID-19, and prior Congressional action in the Continuing Appropriations Act, 2021 that limited the 2021 Medicare Part B monthly premium increase during the COVID-19 pandemic. It also reflects the need to maintain a contingency reserve for unanticipated increases in health care spending, particularly certain drug costs. There is significant uncertainty regarding the potential for future coverage of clinician-administered Alzheimer’s drugs (i.e., Aduhelm™), requiring additional contingency reserves. Potential Medicare drug coverage is currently the subject of a Medicare National Coverage Determination (NCD) analysis, which, if covered, could increase Medicare spending. The proposed NCD on Aduhelm (as well as any drugs in this category) is still to be determined.
Most people with Medicare will see a significant net increase in Social Security benefits. For example, a retired worker who currently receives $1,565 per month from Social Security can expect to receive a net increase of $70.40 more per month after the Medicare Part B premium is deducted.
“CMS is committed to ensuring high quality care and affordable coverage for those who rely on Medicare today, while protecting Medicare’s sustainability for future generations," said CMS Administrator Chiquita Brooks-LaSure. “The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program. The Biden-Harris Administration is working to make drug prices more affordable and equitable for all Americans, and to advance drug pricing reform through competition, innovation, and transparency.”
By law, the Medicare Part B monthly premium must equal 25 percent of the estimated total Part B costs for enrollees age 65 and over. CMS has a responsibility to establish an annual Part B premium that will adequately fund projected Medicare spending and maintain an adequate reserve in case actual costs are higher than estimated.
The annual deductible for Medicare Part B beneficiaries grows with the Part B financing and is increasing from $203 in 2021 to $233 in 2022.
The Administration is taking action to address the rapidly increasing drug costs that are posing a threat to the future of the Medicare program and that place a burden on people with Medicare. President Biden has proposed to lower prescription drug costs for Americans by letting Medicare negotiate drug prices as part of his Build Back Better agenda. In addition, Department of Health and Human Services Secretary Xavier Becerra released a comprehensive plan to lower drug prices as part of President Biden’s Executive Order on Promoting Competition in the American Economy. The plan includes legislative and administrative proposals to reduce drug costs in Medicare Parts B and D."
Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. These income-related monthly adjustment amounts [IRMAA] affect roughly 7 percent of people with Medicare Part B [and include individuals earning over $91,000 and couples earning over $182,000].<The 2022 Part B premiums for high-earning Medicare beneficiaries are shown in our article:
Medicare Part A covers inpatient hospital, skilled nursing facility, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.
The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,556 in 2022, an increase of $72 from $1,484 in 2021 (and $1,408 in 2020). The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. In 2022, beneficiaries must pay a coinsurance amount of $389 per day for the 61st through 90th day of a hospitalization ($371 in 2021) in a benefit period and $778 per day for lifetime reserve days ($742 in 2021). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $194.50 in 2022 ($185.50 in 2021).
|Part A Deductible and Coinsurance Amounts for Calendar Years 2019, 2020, 2021, and 2022
by Type of Cost Sharing
|Inpatient hospital deductible||$1,364||$1,408||$1,484||$1,556|
|Daily coinsurance for 61st-90th Day||$341||$352||$371||$389|
|Daily coinsurance for lifetime reserve days||$682||$704||$742||$778|
|Skilled Nursing Facility coinsurance||$170.50||$176||$185.50||$194.50|
Enrollees age 65 and over who have fewer than 40 quarters of coverage and certain persons with disabilities pay a monthly premium in order to voluntarily enroll in Medicare Part A. 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. 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.Sources include: