On November 12, the Centers for Medicare & Medicaid Services (CMS) released the 2022 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, as well as the 2022 Medicare Part D income-related monthly adjustment amounts.
Medicare Part B Deductible Increase
The annual Medicare Part B deductible increases to $233 in 2022, an increase of $30 from the $203 deductible level applicable in 2021. 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.
Medicare Part B Premium Increase
Each year the Medicare Part B premium is set according to the Social Security Act. The standard monthly premium for most Medicare Part B enrollees will be $170.10 for 2022, an increase of $21.60 from the $148.50 monthly premium applicable in 2021.
According to CMS the nearly 15% increase to the Medicare Part B premium and deductible levels are due to the following factors:
- Rising prices and utilization across the health care system that drive higher premiums year-over-year alongside anticipated increases in the intensity of care provided.
- Congressional action to significantly lower the increase in the 2021 Medicare Part B premium, which resulted in the $3.00 per beneficiary per month increase in the Medicare Part B premium (that would have ended in 2021) being continued through 2025.
- Additional contingency reserves due to the uncertainty regarding the potential use of the Alzheimer’s drug, Aduhelm™, by people with Medicare. In July 2021, CMS began a National Coverage Determination analysis process to determine whether and how Medicare will cover Aduhelm™ and similar drugs used to treat Alzheimer’s disease. As that process is still underway, there is uncertainty regarding the coverage and use of such drugs by Medicare beneficiaries in 2022. 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.
CMS said the rise in Social Security benefits, which most of the 62 million people on Medicare, who are mostly 65 and older, collect will cover the expenses, as there is expected to be a 5.9% bump in 2022 monthly payments due to cost-of-living adjustment the agency said, the largest in 30 years.
"This significant COLA increase will more than cover the increase in the Medicare Part B monthly premium," CMS said. "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."
The cost-of-living adjustment goes into effect in January and is estimated to average $71.40 per recipient.
Click here for the November 12th Fact Sheet published by CMS.
Until next time,
Andrew Herman
