An increase in Medicare Part B premiums will eat into the 2022 cost-of-living adjustment recently announced by Social Security. (Part B covers physician services, outpatient care, certain home health services, medical equipment, and medications given in doctors' offices.)
Most Medicare recipients have Part B premiums deducted directly from their monthly Social Security check, so rising Part B premiums have a direct impact on the amount of a retiree's monthly benefit.
In addition to the premium increase, the Part B deductible is going up too. Here are the specific dollar amounts for the increases from the Centers for Medicare & Medicaid Services (CMS):
The standard monthly premium for Medicare Part B enrollees will be $170.10 for 2022, an increase of $21.60 from $148.50 in 2021. The annual deductible for all Medicare Part B beneficiaries is $233 in 2022, an increase of $30 from the annual deductible of $203 in 2021.
In percentage terms, the Part B premium is going up 14.5% and the Part B deductible is rising by 14.8%. (In contrast, Social Security's cost of living increase for 2022 is 5.9%.)
The Part B surcharge
Higher-income Medicare recipients must also pay a Part B premium surcharge known as the Income Related Monthly Adjustment Amount (IRMAA). That amount of the surcharge is based on one's Modified Adjusted Gross Income from two years earlier. So 2022 IRMAA thresholds are based on 2020 income.
Here's a CMS table showing the surcharge amounts and total premiums at various levels of income. (The first column lists the brackets for single taxpayers. The second column has the brackets for married couples filing jointly, however the surcharge shown is per person.)
If you're facing an IRRMA surcharge and your income is now significantly lower than it was in 2020, you can make an appeal and the surcharge might be dropped.
Other increases for 2022 — and a decrease!
Some Medicare Part A (hospitalization) costs are going up next year too, as shown in this CMS table:
There is some relatively good news. CMS announced that the average 2022 premium for Part D — private health plans that cover prescription drugs — will be up only slightly in 2022: $33.00 per month, compared to $31.47 this year. (Higher-income beneficiaries will pay the most for prescription coverage because income-related surcharges apply to Part D premiums too.)
Another bright spot: The average premium for Medicare Advantage plans will be lower in 2022 — at $19 per month, compared to $21.22 in 2021, according to CMS. Medicare Advantage is the private plan alternative to traditional Medicare.
The annual Open Enrollment period for Medicare continues through Dec. 7, 2021. During Open Enrollment, people eligible for Medicare have the opportunity to compare options and change plans/coverage for the following year.