Posted on March 24, 2022 by Austin Lang
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Posted on March 24, 2022 by Austin Lang
Have you noticed your Original Medicare premiums are higher this year? You’re not alone: 2022 Medicare costs have seen a major spike this year, though there are steps you can take to mitigate the spike in price.
Unfortunately, yes. The majority of Americans need to pay for Medicare coverage, with your premiums usually coming from your Social Security benefit. Like private health insurance, you need to pay premiums, meet deductibles, and share some of the cost for your healthcare services.
This increase in cost isn’t based on profit either: Medicare is required to increase its premiums each year to account for inflation, the rising cost of health care, and unanticipated surges in healthcare spending. Normally, this is a relatively small jump. In 2022, it’s a bit of a different story.COVID-19 is partially to blame for this spike in prices: due to the 2021 Continuing Appropriations Act, Medicare was limited in the changes to its premiums it could make during the COVID-19 pandemic. Now those restrictions have been relaxed, but an exhausted Medicare system needs to make up for lost funds and prepare for the next major emergency. This, combined with the largest cost-of-living adjustment in 30 years, means you might have some sticker shock this year.
Most people don’t pay a premium for Medicare Part A, provided they’ve paid into Medicare through their payroll taxes for at least ten years. Those that haven’t paid Medicare taxes will see an increase in premiums of up to $499 a month in 2022.
The 2022 Medicare Part A deductible is a more wide-reaching issue. The Centers for Medicare and Medicaid Services (CMS) have announced a $1556 deductible for hospital services, with cost-sharing obligations of $389 per day after 60 days, and $770 for ‘reserve days’ that begin after 90 days of hospitalization. These prices affect all Medicare Part A beneficiaries, regardless of how much you’ve paid into taxes.
Seeing a doctor is also getting more expensive. The 2022 Medicare Part B deductible has also increased to $223 per year: considerably lower than Part A. However, you will likely see Part B premium increases as well. The typical premium for most Americans is $170.10 a month, though this can increase significantly for households with higher incomes. Your cost-sharing obligations remain the same, at 20 percent of the Medicare-approved cost for most services.
Your 2022 Medicare Part D premiums may also increase, though unlike with Parts A and B, this may vary. Medicare Part D is a private service that covers the cost of prescription medications and varies in price based on your provider and zip code. However, as inflation rises and suppliers still struggle to meet demand due to COVID-19, you may see an increase in premiums depending on your specific plan.
Luckily, these spikes in prices come with a counterpoint. The cost of living adjustment that drove these large price increases also means that Social Security beneficiaries will see an increase in payments. If you have your Part B premium automatically deducted from Social Security, as many Americans do, you’ll actually see a net gain in your bank account.
But what if you’re not collecting Social Security? While there are many services available to help cover Medicare costs, one surprising option is to go with a Medicare Advantage plan.
It seems counterintuitive: how can paying for more coverage, like Vision and Dental, save you money? The thing is, many people don’t pay a premium for Medicare Advantage coverage, and those that do often pay less than the price of Medicare Part B. These plans also offer the Medicare Give Back Benefit, in which they will pay all or part of your Part B premiums. Some plans will even cover your deductibles for Parts A and B.
With the right Medicare Advantage plan, you might not even notice next year’s price increases, keeping your health and your wallet safe and sound.