Summary
- Costs related to Medicare Part A are on the rise, although the large majority of people don’t pay a Part A premium.
- Medicare Part B monthly premium for 2022 is $170.10, and the Part B annual deductible for 2022 is $233.
- The higher costs are somewhat offset by a historic increase in Social Security benefits.
- The lowest cost for most coverage may not always be the best option for you.
Medicare Part A Costs for 2022
Most people don’t have to pay a monthly premium for Medicare Part A, commonly referred to as “hospital insurance.” You will be responsible for covering some costs of treatment in a hospital or other approved facility.
| Part A Costs: | What You Pay in 2022: |
| Premium | $0 for most people. This is sometimes called "premium-free Part A".
If you don't qualify for a premium-free Part A, you might be able to buy it. In 2022, the premium is either $274 or $499 per month, depending on how long you or your spouse worked and paid Medicare taxes.
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| Deductible | $1,556 for each time you're admitted to the hospital per benefit period before Original Medicare starts to pay. There's no limit to the number of benefit periods you can have. |
| Inpatient Stays (Co-Pays) | Days 1-60: $0 after you pay your Part A deductible. Days 61 - 90: $389 each day. Days 91 - 150: $778 each day while using your 60 lifetime reserve days. After day 150: You pay all costs |
Medicare Part B Costs for 2022
The Medicare Part B monthly premium is rising to historic levels for 2022.
| Part B Costs: | What You Pay in 2021: |
| Premium | $170.10 per month (or higher depending on your income). The amount can change each year. You'll pay the premium each month, even if you don't get any Part B covered services.
You might pay a penalty if you don't sign up for Part B when you're first eligible. How much is the Part B late enrollment penalty?
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| Deductible | You'll pay $233, before Original Medicare starts to pay. You pay this deductible once each year. |
| Costs for Services (Co-Insurance) | You'll typically pay 20% of the cost for each Medicare-covered service or item after you've paid your deductible. |
Medicare Part D Costs for 2022
Monthly premiums for Medicare Part D vary by plan, and enrollees who make more may pay more. These private carrier plans have five tiers offering a variety of copays, generic drugs or brand name drugs, and areas of availability. If you don’t enroll initially, there will be a late enrollment penalty, which you could pay as long as you have Medicare drug coverage.
Medicare Supplement (Medigap) Costs for 2022
Medicare Supplement (Medigap) costs will vary greatly by plan and insurance company. Insurance companies may charge different premiums for the exact same policy. As you shop for a policy, be sure you're comparing the same policy. For example, compare Plan A from one company with Plan A from another company.
Medicare Part C Costs for 2022
Medicare Part C (Advantage) coverage costs depends on where you live, and which plan you choose. It does often have lower costs than Original Medicare, and also has a maximum out-of-pocket, meaning once you’ve reached the limit you don’t have to pay anything the rest of the year.
Income Related Adjustments for Part B, Part D
Part B has a standard premium that is set each year, and Part D prescription drug plans have a premium that varies from plan to plan. If you are considered a higher earner, you will have to pay a higher premium.
The Centers for Medicare and Medicaid Services estimates that 7% of Medicare beneficiaries are impacted by the following Income Related Monthly Adjusted Amounts (IRMAA), which are based on your 2020 modified adjusted gross income (it is based on the income you reported on your IRS tax return two years prior). The Social Security Administration sets four income brackets to determine your (or your spouse's) IRMAA.
Part B IRMAA Rates for 2022
| Your premium will change based on income as follows: | ||
| Your Annual Income | ||
| Individuals | Couples | Your Monthly Premium in 2022 |
| $91,000 and less | $182,000 and less | $170.10 |
| $91,000 - $114,000 | $182,001 - $228,000 | $238.10 |
| $114,001 - $142,000 | $228,001 - $284,000 | $340.20 |
| $142,001 - $170,000 | $284,001 - $340,000 | $442.30 |
| $170,001 - $499,999 | $340,001 - $749,000 | $544.30 |
| $500,000 and above | $750,000 and above | $578.30 |
If you were married and lived with your spouse during the tax year but filed a separate return, your Part B IRMAA is as follows.
Annual income up to $91,000
- IRMAA: $0
Annual income from $91,001-$409,000
- IRMAA: $374.20
Annual income greater than $409,000
- IRMAA: $408.20
What it Means for You
You now have a lot of information at your fingertips about 2022 Medicare costs, but what do you do with it? Parts A and B coverage are the cornerstone of Original Medicare. Parts A and B coverage are also at the heart of Medicare Advantage, an alternative to Original Medicare offered by private insurance companies that includes Parts A and B coverage but offers additional benefits and potential savings.
Original Medicare
- If you have a qualifying work history, your Part A benefits don’t come with a monthly premium.
- Your Medicare Part B premium is set each year by the federal government and income brackets determine if you pay a standard rate or more.
- There is no limit on what you pay out of pocket each year. You will always be responsible for 20% of expensive treatments or surgery. These services can be costly.
- Original Medicare usually costs more than Medicare Advantage but can make budgeting your healthcare costs easier by offering predictable pricing for services.
- Original Medicare does not have the protection of out-of-pocket limits.
Medicare Advantage
- Your Part A and Part B coverage are always the same but networks, copays, and Rx options can change from plan to plan. You must still pay your Part B premium if you switch to Medicare Advantage.
- Insurance companies are paid by the federal government to administer Medicare Advantage plans and each company determines their plans' costs.
- Roughly half of all Medicare Advantage plans offer a Part D plan without an additional deductible.
- Medicare Advantage offers maximum out-of-pocket (MOOP) limits, so any covered services after reaching MOOP cost nothing for the remainder of the calendar year.
Other Factors Than Cost
You want to make sure to pick health insurance that is right for you. Here are some factors to consider when selecting which plans and coverage combinations are right for you.
Total Cost for Care
It’s important to think about your total out-of-pocket costs. This includes copayments, coinsurance, deductibles, out-of-pocket maximums, and drug costs.
Provider
Some plan types have a network of providers you’ll have to use in order to avoid extra fees (out of network fees). If you have a particular doctor or pharmacy that you prefer to go to, make sure to find a plan that has them "in-network".
Desired Benefits
Consider what type of coverage and care you will need. There may be limitations in coverage of Medicare Part A and Part B that a Medicare Advantage plan doesn't have. For example, some Medicare Advantage plans offer prescription drug, vision, hearing, and dental coverage.
Overall “Star Rating”
Medicare uses a Star Rating System to measure how well Medicare Advantage and Part D plans perform. A plan can get a rating between 1 and 5 stars.
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