Large increase in Medicare premiums
The 14.5% increase in Part B premiums will mean monthly payments for those with the lowest income group of $ 148.50 per month this year to $ 170.10 in 2022. Part B Medicare covers medical services, outpatient hospital services, certain home health services, medical equipment, and certain other medical and health services not covered by Medicare Part A, including medications administered in medical offices.
The Centers for Medicare & Medicaid Services downplayed the increase, noting that most beneficiaries will also receive Social Security benefits and see a 5.9% cost-of-living adjustment in their 2022 monthly payments. say the agency in a statement. This is the biggest blow in 30 years.
“This significant increase in COLA will cover more than the increase in the Medicare Part B monthly premium,” CMS said. “Most people with Medicare will see a significant net increase in Social Security benefits. For example, a retired worker who currently receives $ 1,565 a month in Social Security can expect to receive a net increase of $ 70.40 more per month. but after the Medicare Part B premium is deducted. ”
The increase, however, is much more than what Medicare administrators estimated in their annual report, which was released in late August. They predicted that the monthly premium for 2022 would be $ 158.50.
The real increase, the largest since 2016, could hurt some seniors financially.
“It will consume the entire annual cost of living adjustment (COLA) of Social Security beneficiaries with the lowest benefits, about $ 365 a month,” said Mary Johnson, a Social Security and Medicare policy analyst at The Senior Citizens League, an advocate. group. “Social Security beneficiaries with higher benefits should be able to cover the $ 21.60 monthly increase, but they may not end up with the excess amount they had.” Medicare premiums tend to rise at a much faster rate than the Social Security year. adjustments, the league said. And much of the increase in Social Security benefits in 2022 will be consumed by inflation, which is also rising rapidly.
CMS said part of the increase for 2022 was due to uncertainty about how much the agency will end up paying to treat beneficiaries who will be treated with Aduhelm, an Alzheimer’s drug approved by the Food Administration. and U.S. Medicines in June for objections from its advisers. Some experts estimate it will cost $ 56,000 a year. Medicare is deciding whether to pay for it now on a case-by-case basis.
Because Aduhelm is administered in physicians’ offices, it should be covered by Medicare Part B plans, not Part D plans, which pay for drugs purchased at pharmacies. Traditional Medicare enrollees are charged 20% of the cost of most Part B drugs, which would translate into about $ 11,500 in out-of-pocket costs for those prescribed by Aduhelm.
“The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program,” CMS administrator Chiquita Brooks-LaSure said in a statement. a statement. “The Biden-Harris administration is working to make drug prices more affordable and equitable for all Americans, and to advance drug price reform through competition, innovation, and transparency.”
In addition, Congress last year limited the 2021 premium increase, although Medicare emergency spending increased during the coronavirus pandemic. The monthly fee went up less than $ 4.
Along with the premium increase, the annual deductible for Medicare Part B beneficiaries increases to $ 233 in 2022, more than $ 203 in 2021.
Medicare is the federal health insurance plan that covers more than 62 million people, most of whom are 65 or older.
Part B premiums are based on income. Individuals earning $ 500,000 or more a year and joint taxpayers earning $ 750,000 or more annually will pay $ 578.30 a month for coverage in 2022.