Medicare

What Retirees Will Pay for Medicare in 2022

Seniors will pay more for Parts B and D next year, though Medicare Advantage plans should be slightly cheaper.

Health care can get expensive, and Medicare is no exception.

Because of that, it’s essential that Medicare beneficiaries know what their out-of-pocket expenses will be. This can be different depending on your income level and which plan you select.

This rundown of what you can expect to pay in 2022 should help you get the most out of your Medicare coverage.

Medicare Part B Premium 2022. Although Part A, which pays for hospital care, is free for most beneficiaries, you’ll pay a monthly premium for Part B, which covers doctor visits and outpatient services. In 2022, the standard monthly premium will be $170.10, up from $148.50 in 2021.

But if you’re a high earner, you’ll pay more. Surcharges for high earners are based on adjusted gross income from two years earlier. In 2022, beneficiaries with a 2020 AGI of more than $91,000 ($182,000 for married couples filing jointly) will pay $238.10 to $578.30 per month for Part B. Those income ranges and surcharges are higher than this year. Surcharges in 2021 for beneficiaries with 2019 AGIs of more than $88,000 (more than $176,000 for married couples filing jointly) ranged between $207.90 and $504.90.

Medicare Part D. The average premium for Part D, which covers drug costs, will be about $33 a month in 2022. Seniors with high drug costs may run into a coverage gap.

For 2022, the gap begins when the total your plan has paid reaches $4,430, up from $4,130 in 2021. At that point, you won’t pay more than 25% of the expenses for your plan’s covered medications. Drug manufacturers will pick up 70% of the tab, and insurers will pay 5%. Medicare picks up most of the cost, after a small co-pay, once your out-of-pocket spending hits $7,050 (including whatever drug manufacturers paid on your behalf in the coverage gap), up from $6,550 in 2021.

Mind the gap. If you’re new to Medicare, you may be surprised to discover what it doesn’t cover. Part B pays for only 80% of doctor’s visits and other outpatient services. In addition, Medicare doesn’t cover dental care, eye appointments or hearing aids.

There are two ways to address your uncovered expenses. Medicare supplemental insurance, or medigap, policies are offered by private insurers and cover deductibles and co-payments. Medigap policies are identified by letters A to D, F, G, and K through N. Each policy that goes by the same letter must offer the same basic benefits, and usually the only difference is the cost.

Plan F has been popular because of its comprehensive coverage, but as of 2020, Plan F (as well as Plan C) is unavailable for new enrollees. The closest substitute for Plan F is Plan G, which pays for everything that Plan F did except the Medicare Part B deductible. Monthly premiums for Plan G in 2022 should average $100 to $200, depending on your age and state, according to MedicareFAQ, an insurance agency that sells supplemental Medicare plans. Anyone enrolled in Medicare before 2020 can still sign up for plans F and C.

An alternative to having both traditional Medicare and a medigap plan is to enroll in a Medicare Advantage plan. Such plans provide medical through private insurance companies. Most of these plans also offer prescription drug coverage. The monthly premium, in addition to Part B, varies depending on which plan you choose. The Center for Medicare and Medicaid Services estimates that the average monthly premium will be $19 in 2022, down from $21.22 in 2021. Advantage policies charge lower premiums than medigap plans but have higher deductibles and co-payments, and your choice of providers may be more limited than with traditional Medicare.

Most Popular

Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The Berkshire Hathaway Portfolio: All 41 Warren Buffett Stocks Ranked
stocks

The Berkshire Hathaway Portfolio: All 41 Warren Buffett Stocks Ranked

The Berkshire Hathaway portfolio is a diverse set of blue chips, and increasingly, lesser-known growth bets. Here's a look at every stock picked by Wa…
November 16, 2021
The Case Against Owning All Dividend-Paying Stocks in Retirement
investing

The Case Against Owning All Dividend-Paying Stocks in Retirement

Income investors are often all about dividends, but that may not be a smart strategy for retirees. Here’s why, and what investment model they should c…
November 8, 2021

Recommended

7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare.
November 16, 2021
11 Costly Medicare Mistakes You Should Avoid Making
Medicare

11 Costly Medicare Mistakes You Should Avoid Making

If you don't make the right choices, you could end up with high Medicare premiums and big out-of-pocket costs.
November 16, 2021
What You Must Know About the Different Parts of Medicare
Medicare

What You Must Know About the Different Parts of Medicare

Medicare can be complicated but we've got you covered. Here is a quick guide to the different benefits provided through each part.
November 16, 2021
Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

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 --…
November 16, 2021