Retirees may have felt relieved when Social Security announced a 5.9-percent increase in benefits for 2022. Shortly afterward, the same population might have experienced some disappointment to learn that they would need to pay more for critical Medicare benefits. While most beneficiaries will still see more income in their Social Security checks, these Medicare increases may hit some beneficiaries particularly hard.
Which Medicare Costs Will Increase in 2022?
According to CNBC, early Medicare trustee forecasts pegged the 2022 Medicare Part B increase at 6.2 percent. The announcement of a 14.5 percent increase surprised a lot of people. The increase raises the standard Medicare Part B premium to $170.10, up from $148.50 for 2021.
Other associated increases in Medicare costs include:
- The annual Part B deductible for most Medicare recipients will increase $30 to $233. Some high-income earners also pay an additional surcharge for Medicare Part B.
- The Part A deductible for each benefit period will increase $72 to $1,556.
Medicare beneficiaries might also keep an eye out for notifications from insurance companies to see if Medicare supplements and Medicare Advantage plans increase their costs.
What’s Driving the Medicare Price Increases?
The Centers for Medicare and Medicaid Services, or CMS, blamed the significant increase on several factors. For one thing, the government limited Medicare increases in 2021 because of the pandemic, so CMS says they need to catch up. Also, because of the pandemic, Medicare has spent more to pay for increased system utilization.
Also, CMS considered increases in drug prices. In particular, the FDA approved a new Alzheimer’s Disease medication called Aduhelm. Forecasters estimate that this new drug will cost over $50,000 a year. Medicare Part B does not cover typical prescriptions, but it does help pay for medicine administered by clinicians. If CMS decides to cover it, Medicare will need to pick up 80 percent of the cost.
How Will Medicare Price Increases Impact Beneficiaries?
Sadly, Medicare recipients with lower incomes will probably feel the sting of this increase the most. CMS offered the example of a beneficiary with a current $1,565 Social Security check getting an increase of about $70 a month after subtracting higher Part B premiums.
However, that figure does not account for higher Part A and Part B deductibles or possible increases in private plan costs. Along with anticipated inflation for healthcare and other products and services, retirees with small to modest incomes may need to take extra care with their finances next year.
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