Medicare Part B Premium Jumps Dramatically for 2022
Rising health care costs and the approval of Aduhelm, a new expensive Alzheimer's drug, were partly to blame for increases in the Part B premium and deductible.
Medicare beneficiaries will pay more – a lot more – for Part B in 2022.
The Centers for Medicare & Medicaid Services said on Friday that the standard monthly Part B premium for next year will be $170.10. That’s an increase of 14.5%, or $21.60, from 2021. The annual Part B deductible will be $233, an increase of $30 from 2021.
The increases were due to rising health care costs and higher utilization of health care services, Medicare said. Congress also limited the Part B premium increase in 2021 -- premiums only rose $3 a month this year -- but Medicare now has to pay that back, starting in 2022.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Medicare beneficiaries potentially being prescribed the Alzheimer’s drug, Aduhelm, which was approved by the Food and Drug Administration earlier this year, was also to blame, Medicare said. Aduhelm’s price tag – $56,000 per person each year – has been criticized and has raised questions about the strain it would put on Medicare’s finances.
The Kaiser Family Foundation estimated in June that if just a quarter of the 2 million beneficiaries who were prescribed an Alzheimer’s treatment under Part D in 2017 took Aduhelm, it would cost Medicare $29 billion in one year. To put that into perspective, Medicare spent $37 billion on all Part B drugs in 2019, KFF said.
Since Aduhelm must be administered by a doctor, it is covered under Part B and not under a prescription drug plan. Medicare started a National Coverage Determination in July to determine whether and how the agency would cover the treatment and other similar Alzheimer’s drugs.
“While the outcome of the coverage determination is unknown, our projection in no way implies what the coverage determination will be, however, we must plan for the possibility of coverage for this high cost Alzheimer’s drug which could, if covered, result in significantly higher expenditures for the Medicare program,” Medicare said in a press release.
Single filers who make less than $91,000 in modified adjusted gross income (less than $182,000 for joint filers) will pay the standard Part B premium in 2022. They will also pay the standard premium for their Part D prescription drug coverage plan.
Beneficiaries who make more than those thresholds will pay a surcharge, called an income-related monthly adjustment amount, for Parts B and D. This applies to about 7% of enrollees for Part B and about 8% for Part D, Medicare said. Monthly Part B premiums for those hit with an IRMAA will range from $238.10 to $578.30, depending on the beneficiaries’ income.
As for Part D IRMAAs, beneficiaries will pay $12.40 to $77.90 per month in addition to their plan’s premium, depending on their income. In September, Medicare said the average premium for Part D for 2022 would be $33, up from $31.47 this year.
The Medicare Part A deductible for 2022 will be $1,556. That’s $72 higher than 2021. This covers the first 60 days of inpatient care at a hospital during a benefit period. After that, enrollees will pay $389 each day for days 61 to 90 during a hospital stay. That’s up from $371 in 2021. Beneficiaries will then pay $778 (up from $742 in 2021) per day for lifetime reserve days.
Enrollees will pay $194.50 per day in coinsurance for days 21 through 100 during a stay at a skilled nursing facility in 2022. That’s $9 more than what beneficiaries paid in 2021.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Jackie Stewart is the senior retirement editor for Kiplinger.com and the senior editor for Kiplinger's Retirement Report.
-
One Good Way to Withdraw Retirement Assets (and a Bad One)
Don't withdraw retirement assets haphazardly. Managing distributions intentionally can lower your taxes, conserve your wealth and reduce Medicare premiums.
By Justin Haywood, CFP® Published
-
What Is Capital Gains Tax Deferral?
Spoiler alert: It's the secret weapon of savvy real estate investors. Here's how it works and details about the tools you need to do it.
By Daniel Goodwin Published
-
457 Plan Contribution Limits for 2025
Retirement plans There are higher 457 plan contribution limits for state and local government workers in 2025 than in 2024.
By Kathryn Pomroy Last updated
-
Medicare Basics: 11 Things You Need to Know
Medicare There's Medicare Part A, Part B, Part D, Medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare — and much more.
By Catherine Siskos Last updated
-
Six of the Worst Assets to Inherit
inheritance Leaving these assets to your loved ones may be more trouble than it’s worth. Here's how to avoid adding to their grief after you're gone.
By David Rodeck Last updated
-
SEP IRA Contribution Limits for 2024 and 2025
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 in 2024 and $70,000 in 2025..
By Jackie Stewart Last updated
-
Roth IRA Contribution Limits for 2024 and 2025
Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
By Jackie Stewart Last updated
-
SIMPLE IRA Contribution Limits for 2024 and 2025
simple IRA The SIMPLE IRA contribution limit increased by $500 for 2025. Workers at small businesses can contribute up to $16,500 or $20,000 if 50 or over and $21,750 if 60-63.
By Jackie Stewart Last updated
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2025
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Last updated