How Much Does Medicare Cost? 2022 Update

How much does Medicare cost?  Read this article to get a run down on what your Medicare coverage will cost you.
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Introduction

Medicare is a federal program that provides health insurance to those over the age of 65, as well as certain individuals under 65 with disabilities.

While Medicare helps to cover your health care costs, it does not pay for all your costs.

So how much does Medicare cost?

If you are eligible for Medicare, you are responsible for paying premiums and out-of-pocket costs such as deductibles, copays and coinsurance for healthcare services that you receive.

In this article, you’ll learn about the most up to date Medicare costs for 2022.

 

How much is Medicare Part A in 2022 (Hospital Insurance)?

Medicare Part A is part of Original Medicare and covers inpatient hospital care, surgeries, lab tests, short-term skilled nursing facilities, home health care as well as hospice care.

 

Part A 2022 Premiums

The good news for most Americans is that about 99% of Medicare beneficiaries are eligible for premium-free Part A coverage.

This means you do not have to pay any premiums at all in order to receive Part A coverage.

In order to be eligible for premium-free Part A coverage you, or your spouse, must have worked and paid Medicare taxes for a minimum of 10 years (or 40 quarters) before enrolling in Medicare.

 

Part A Out-of-Pocket 2022 Costs

How much is Medicare per month 2022? While premiums for Part A are free for many Americans, you will still have out-of-pocket costs that you need to cover.

 

Inpatient Hospital Stays

Under Original Medicare, you will be responsible for deductibles and coinsurance costs during your hospital stay.

In 2022, the Medicare Part A inpatient hospital deductible that beneficiaries will pay when admitted to the hospital is $1,556 in 2022, an increase of $72 from $1,484 in 2021.

The Part A deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.

For the 61st through 90th day of hospitalization, beneficiaries must pay a coinsurance amount of $389 per day ($371 in 2021).

For any days beyond the 90th day beneficiaries will either be responsible for 100% of the cost, or $778 per day ($724 in 2021) if they have unused ‘lifetime reserve days’.

Every Medicare beneficiary is allocated 60 days of lifetime reserve days when they first enroll in Medicare and these days do not renew once used.

 

 

Skilled Nursing Facilities (SNF)

Medicare Part A cost in 2022 will cover care delivered by SNFs on a short-term basis after a qualifying hospital stay of at least 3 days of hospitalization if a doctor has decided that you need daily skilled care.

Your obligations under Medicare Part A for SNF costs include:

  • Days 1–20: $0 for each benefit period
  • Days 21–100: $194.50 coinsurance per day (vs. $185.50 in 2020)
  • Days 101 and beyond: 100% of the costs

 

How much is Medicare Part B in 2022 (Medical Insurance)?

Medicare Part B is part of Original Medicare and covers medically necessary doctor and outpatient medical services and supplies.

This includes ambulance services, durable medical equipment, hospice care, home health care and certain preventive services and screenings.

 

Part B 2022 Premiums

In 2022, the standard monthly premium for Medicare Part B enrollees is $170.10 in 2022, an increase of $21.60 from $148.50 in 2021.

Everyone enrolled in Medicare Part B must pay the monthly premium in order to be enrolled in Part B.

 

Part B Premium Adjustment

If your income reported to the IRS is above a certain threshold, you may pay have to pay a higher Part B premium than the standard rate.

This is known as an Income Related Monthly Adjustment Amount (IRMAA).

Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago, as this is the most recent tax return information provided to Social Security by the IRS, to determine whether you need to pay a higher premium.

For example, Social Security would use tax returns from 2019 to determine your IRMAA in 2021.

In 2022, if your 2020 reported income was over $91,000 individually or $182,000 jointly, your Part B premium will include IRMAA and will be higher than the standard Part B premium.

 

 

Part B 2022 Deductible

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.

You must pay this full amount out of pocket each year before Medicare will start helping to pay for any healthcare costs.

 

Part B 2022 Out-of-Pocket Costs

The cost-share for Medicare Part B out-of-pocket costs is very simple. In 2022, once you have reached your $233 Part B deductible, you typically pay 20% of the Medicare-approved Part B services (such as doctor services, outpatient therapy, and durable medical equipment).

 

How much is Medicare Part C in 2022 (Medicare Advantage)?

Medicare Part C (also known as ‘Medicare Advantage’) plans are a bundled “all-in-one” plan provided by private health insurance companies that are approved by the federal government organization to deliver Medicare to consumers.

These plans provide an alternate method to Original Medicare for receiving Medicare coverage.

By law, Medicare Advantage plans must provide at least the same coverage as you would receive from under Part A and B of Original Medicare.

Medicare Advantage plans often also include Part D (Prescription Drug Coverage) as well as extra benefits such as vision, hearing, dental care that Original Medicare does not cover.

 

Part C 2022 Premiums

If you are on Medicare Advantage (also known as Part C coverage), you are required to continue paying the Medicare Part B premium of $170.10 per month (this may be higher depending on your income as explained earlier in this article).

You may also need to pay a premium on top of the standard Part B premium to the private insurance company, depending on the coverage you choose.

According to CMS, beneficiaries enrolled in Medicare Advantage will pay an average plan premium of around $21.00 per month in 2021 on top of the standard Medicare Part B premium, which is 11% lower than the average plan premium of $19.00 per month in 2022,  compared to $21.22 in 2021(and 41% percent lower than 2017’s average premium of about $32 per month).

There are many plans available that will also have $0 premium, meaning no premium is payable in addition to the standard Medicare Part B premium.

The suitability of these plans will depend on your individual situation.

 

Part C 2022 Out-of-Pocket Costs

Out-of-pocket costs (such as deductibles, copays, and coinsurance costs) will follow the costs that are indicated in your plan’s policy guidelines and will vary from plan to plan.

For most Medicare Advantage plans, you will likely need to pay a copayment of $0 or $20 every time you see your primary doctor ($20 – $50 for specialists).

You will also typically need to pay daily copayments for a portion of your first 5-7 days of any inpatient hospital stay.

 

Medicare Advantage 2022 Out-of-pocket Maximum

Medicare Advantage plans are required by law to limit your out-of-pocket spending.

In 2022, Medicare out-of-pocket costs are capped at a maximum of $7,550 (unchanged from 2021) a year for in-network services and $11,300 (unchanged from 2021) for both in- and out-of-network services.

This is different from Original Medicare, where there is no cap on your 20% share of medical expenses under Part B.

 

How much is Medicare Part D in 2022 (Prescription Drug Coverage)?

Medicare Part D is prescription drug coverage provided by private insurance companies.  If you are on Original Medicare, you can access Part D coverage by purchasing a standalone Prescription Drug Plan (PDP).

Alternatively, you can also access Part D coverage if you enroll in a Medicare Advantage (Part C) plan that bundles in prescription coverage (also known as an ‘MA-PD’ plans).

 

Part D 2022 Premiums

If you are on Original Medicare and purchasing a standalone PDP, Part D premiums will vary by insurer and plan.

The Kaiser Family Foundation estimates that the national average monthly PDP premium for 2021 will to $43, from $41 in 2021.

If you enrolled in an MA-PD plan, Part D coverage is bundled into your monthly Medicare Advantage premium cost (if applicable) and you will not need to purchase a separate Part D plan.

 

Part D 2022 Premium Adjustment

Similar to Medicare Part B, if you are a high-income earner (based on your income from 2 years ago), your Medicare part D drug coverage cost on 2021, will be higher.

This called the Part D Income Related Monthly Adjustment Amount (sometimes known as Part D-IRMAA).

Social Security will contact you if you have to pay the Part D IRMAA.

If you have to pay for the IRMAA, this amount is paid directly to Social Security (rather than your plan provider).

In 2022, the adjustment amounts are as follows:

 

 

Part D 2022 Deductible

Deductibles can vary across Part D plans, however, the government sets the maximum deductible chargeable each calendar year.

In 2022, the maximum Part D deductible is $480, up from $445 in 2021.

If you have a deductible, you must pay for 100% of costs until you reach the deductible amount before your Part D insurance kicks in and helps pay for prescriptions.

 

Part D 2022 Out-of-Pocket Costs

For Part D, your copay and coinsurance obligations may change depending on the four different ‘phases’ of coverage.

You can read more about these ‘phases’ in our guide to Medicare Part D costs.

Plans will generally categorize their formularies into cost-sharing ‘tiers’ which will determine the copayment/coinsurance you will make for the drug you are filling.

Many will have 3 to 4 tiers, with lower tiers costing less than higher tiers.  For example:

  • Tier 1: Generic Drugs
  • Tier 2: Preferred Brand Name Drugs
  • Tier 3: Non-preferred Brand Name Drugs
  • Tier 4: High-cost of ‘specialty’ drugs

 

How much is Medicare Supplement in 2022 (Medigap)?

Medicare Supplement (also known as ‘Medigap’) is sold by private insurance companies and is designed to help pay for the out-of-pocket costs (or ‘gaps’) that the Original Medicare does not cover (such as your 20% coinsurance under Part B).

You cannot purchase a Medicare Supplement policy if you are enrolled in Medicare Advantage.

Similar to Medicare Advantage and Part D, your Medicare Supplement premium 2022 will be determined by your private health insurer and will vary from plan-to-plan and insurer-to-insurer.

The premiums and out-of-pocket costs for Medicare Supplement plans will also vary depending on the type of plan you choose (there are 10 standard plans you can purchase).

Premiums for Medicare Supplement plans can typically range from $80 – $300 per month.

For more information on how Medicare Supplement plans work read our comprehensive guide to Medicare Supplement.

 

Final Words on Medicare 2022 Costs

If you are about to enroll in Medicare, it’s important to know the costs of Medicare so you can make an informed decision on what type of Medicare coverage you want.

Costs will also change year-to-year, so it’s important to always make sure you know what your Medicare costs are prior to each new calendar year starting.

If you are interested in learning more about each type of Medicare coverage outlined in this article, we encourage you to read our Medicare 101 guides.

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