CMS Announces Largest Hike in Medicare Part B Premiums and Deductibles in the Program's History
Published in
Government Relations
on November 15, 2021
November 13th CMS announced that Medicare Part B premiums and deductibles will see the largest hike in the program's history next year.
Seven issues of concern…
- The CMS rule boosts the standard Medicare Part B premium to $170.10 a month, up $21.60, or 14.5 percent. It also increased Part B standard deductibles by $30, up 14.8 percent to $233 in 2022
- The increase translates to nearly $14,000 in annual costs for the wealthiest senior couples.
- Despite a boost in emergency Medicare spending last year, CMS raised Part B premiums less than $4.
- Part B premiums have risen 226 percent since 2000, making them one of the fastest growing costs for older Americans.
- This year, CMS attributed the Part B price hikes to rising healthcare prices and utilization, congressional efforts to limit 2021's increase and the potential to cover Biogen's expensive Alzheimer's drug, Aduhelm.
- CMS said the price hikes will be mitigated by a higher annual Social Security cost of living increase; stakeholders reported that the Medicare increase will eat up most of the record-high Social Security cost-of-living jump.
- CMS also is increasing the Medicare Part A deductible, upping the cost per benefit period $72 to $1,556, a 4.9 percent increase.
(Forbes commentary)
The Centers for Medicare & Medicaid Services has announced Medicare Part B premiums for 2022, and the base premium increases 14.5% from $148.50 a month in 2021 to $170.10 a month in 2022. That $21.60 monthly increase ($260 a year) compares to a $3.90 monthly increase last year. Meanwhile income-related surcharges for high earners have been bumped up again too. The wealthiest senior couples will be paying nearly $14,000 a year in Medicare Part B premiums. Part B (the base and the surcharge) covers doctors’ and outpatient services.
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. Last year, Congress kept the increases in the Part B premiums and the deductible in check with caps as part of a short-term budget bill. So far, no such luck this year.
The CMS announcement comes after last month’s Social Security Administration’s COLA announcement: a 5.9% cost of living adjustment for 2022, compared to the 1.3% cost of living adjustment for 2021. The average Social Security benefit for a retired worker will rise in 2022 by $92 a month to $1,657 in 2022, while the average benefit for a retired couple will grow $154 a month to $2,753.
The higher Medicare Part B premium cuts into retirees’ monthly Social Security payments. Part B premiums typically are deducted from monthly Social Security checks. You can check in December if you have an online Social Security account for your exact benefit amount.
The Part B increase will consume the entire annual cost of living adjustment of Social Security recipients with the very lowest benefits, of about $365 per month, says Mary Johnson, Social Security and Medicare policy analyst with The Senior Citizens League. Medicare Part B premiums tend to grow several times faster than Social Security benefits cost-of-living adjustments almost every year, and rising Part B premiums have ranked as one of the fastest growing costs that older Americans face in retirement, increasing 226% since 2000, Johnson says.
CMS says 7% of Medicare recipients will have to pay income-related surcharges. Earn $1 more in income, and you’re hit with the next highest monthly surcharge, meaning you could be paying $800 or more a year ($1,600 or more a year for a couple) in Medicare Part B premium surcharges.
The graduated surcharges for high-income seniors kick in for singles with modified adjusted gross income of more than $91,000 and for couples with a MAGI of more than $182,000. An individual earning more than $91,000, but less than or equal to $114,000, will pay $238.10 in total a month for Part B premiums in 2022, including a $68 surcharge. That’s up 14.5% from 2021, when they paid $207.90 total in a month, including a $59.40 surcharge.
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