It’s not unusual to see Medicare premiums and deductibles increase each year, and this one was no different. Well, it was a little different because we saw the largest Part B premium increase in the history of the Medicare program. That increase left many beneficiaries wondering what other numbers changed in 2022. Let’s review a few numbers you should know.
The Part B premium saw a 14.5% increase, bringing the standard premium to $170.10. (It was $148.50 last year.) There were several factors that played into this big jump. First, 2021 saw just a $3 increase. Congress imposed limits due to the economic impact of COVID-19, so we saw very little change last year. However, congress also informed CMS that the reduced premium would need to be paid back over time. Packback started in 2022.
Second, the rising cost of healthcare in general, but especially for older adults, continues to hit higher and higher numbers. The pandemic certainly added to the rise in healthcare costs. Higher costs mean higher premiums.
Lastly, and probably the biggest factor in the premium spike, is due to a new Alzheimer’s drug – Aduhelm. The FDA approved Aduhlem in early 2021, although CMS has yet to decide if it will be covered by Medicare. Still, premiums were raised to account for the potential coverage of the drug, which is expected to cost $56,000 per year – for one person. CMS will make a decision on this drug in the spring of this year.
Part A premiums increase as well, but since most Medicare beneficiaries receive premium-free Part A, it was a non-issue for many. If you do have to pay for Part A, you might be looking at a monthly premium of just under $500.
Premiums weren’t the only increase this year. We also saw an increase in Part A, B, and D deductibles.
The Part A deductible is currently $1,556 per benefit period, which is up $72 from 2021. And remember, this is a “benefit period” deductible, so you could pay it more than once per year. A benefit period begins the day you become an inpatient at either a hospital or skilled nursing facility and ends 60 days after you’ve been discharged. The per-day coinsurance costs have also gone up. Days 61-90 will cost you $389 per day (an increase of $18), and lifetime reserve days will cost you $778 per day (an increase of $36).
The Part B deductible went up from $203 to $233 and is only paid once annually. Your Part B coinsurance costs will remain more or less the same since Part B works as an 80/20 cost-sharing split. (Medicare pays 80%, and you pay 20%.)
Lastly, the standard Part D deductible went up from $445 to $480. While most Part D plans use the standard deductible, it’s typically waived for medications in the first one or two tiers, meaning that it won’t apply to more common, generic medications.
Additionally, the coverage thresholds for Part D plans changed. Once you and your plan have spent a total of $4,430 on prescriptions, you’ll enter the coverage gap. (That number is up from $4,130 in 2021.) The amount you’ll pay while in the gap is still the same; only the thresholds have changed. To get out of the gap and into catastrophic coverage, you’ll need to spend $7,050, which is an increase of $500 from last year. If you are someone who takes expensive medications, that number could be concerning.
If you are concerned about any of these increases, give The McCormick Agency a call today. Our licensed insurance agents will make sure we’re doing everything we can to help reduce your insurance premiums and your medical costs.