Medicare Costs Will Increase in 2022—By How Much Though?

Medicare is a health insurance program that's administered by the Centers for Medicare and Medicaid Services. Individuals with disabilities and/or those who are aged 65 and older rely on Medicare. In 2020, Statista reported that “62.6 million people were enrolled in the Medicare program,” which shows how much people depend on Medicare.

Medicare benefits are divided into four parts—A, B, C, and D. Most people aren’t required to pay a monthly premium for Part A benefits, although parts B, C, and D usually carry a premium, which is divided into 12 monthly payments. In 2022, Medicare costs will be increasing, and we’ll get into exact dollar amounts down below.

Medicare released its 2022 premiums, deductibles, and coinsurance fee schedules on Nov.12, which revealed a significant increase in costs. Below is an outline of the current costs for Medicare Part A and B benefits and what you can expect to pay in 2022.

In 2021, Medicare charged $471 for a Part A premium. While most people aren’t required to pay a monthly premium for Part A benefits, those who do will need to pay $499 in 2022. Part A hospital inpatient and deductible insurance fees will also be increasing in 2022. Deductibles for each benefit period will increase from $1,484 to $1,556.

Below are the coinsurance fees for Part A benefits in 2022:

• Day 1–60: $0 coinsurance per benefit period
• Day 61–90: $389 (an increase of $18) coinsurance per day of each benefit period
• Day 91 and beyond: $778 (increase of $36) coinsurance per each “lifetime reserve day after day 90 for each benefit period”
• Beyond lifetime reserve days: You pay all costs

Medicare Part B, which typically covers routine visits to the doctor and outpatient services, will also rise in 2022. Current Medicare beneficiaries are paying $148.60 or higher for their standard Part B monthly premium, although they will be required to pay $170.10 a month in 2022.

Part B premiums are determined using your income and therefore, you might be subject to paying a higher premium if you're considered a higher income earner. Medicare’s Part B annual deductible and coinsurance will be increasing from $203 to $233 in 2022. Once your deductible is met, you will still be required to pay 20 percent of the Medicare-Approved Amount for medical services.

It’s worth noting that some medical providers apply the 20 percent to a different fee schedule that's specifically used for Medicare beneficiaries.

Medicare noted the reasons for the increase of Medicare Part B costs in 2022:

• An increase in healthcare system utilization coupled with soaring prices and more “intense” care being provided.
• A lack of Congressional action to lower costs. The $3 per beneficiary per month increase that would have ended in 2021 will now continue through 2025.
• “Additional contingency reserves due to the uncertainty regarding the potential use of the Alzheimer’s drug, Aduhelm™, by people with Medicare.”

Healthcare costs have steadily climbed over the years. Statista reported that in 2020, the yearly cost to treat patients rose by 6 percent and it was projected that it would go to 7 percent in 2021. Although Medicare recipients are usually living on a limited income with little to spend on healthcare, the program clearly isn't exempt from price increases.