Every year we look forward to reading the Annual Report of the Board of Trustees of the Federal Hospital Insurance and Federal Supplementary Insurance Trust Funds to get the new Medicare Premium and Deductible Estimates. Suppose you think we are nerds based on that terminology. In that case, this report gives an annual dive into the solvency of Medicare Parts A, B, C, and D. It also gives us predictions of premiums and cost-sharing variables like deductibles, copays, and maximum out-of-pocket or MOOPs, etc. This year’s report came out a little later than the ones in the past. It occurred just published on August 31st, 2021.
As a disclaimer, we must always note that these close numbers aren’t always 100% accurate. 2022 Medicare Part B premium and deductible and the Part D deductible numbers we will share here are not official yet, but the official ones will be released later this year.
Part B of Medicare is the 80% medical coverage offered by Medicare. It does not cover hospitalization. Its purpose is doctors and specialist visits, outpatient treatment like chemotherapy and radiation, surgeries, anesthesia, etc. Part B’s premium typically increases a marginal amount each year to help offset the rising cost of the Medicare program. As part of that plan, Part B also tends to raise cost-sharing slightly by increasing the deductible.
Part B Premium
The Part B premium for people who do not qualify for extra help and do not fall in the Income Related Monthly Adjustment Amount or IRMAA category is currently $148.50 per month. It is estimated to have its highest single-year increase since the transition from 2015-2016. This estimation brings it to $158.50 per month. If someone gets Part B paid for by Extra Help or Medicaid, that subsidy would likely increase to offset the additional $10 per month.
Part B Deductible
The Medicare Part B deductible in 2021 is $203. It went up to $5 last year from $198 in 2020. The estimate again is calling for an unusually high increase of $14 per year to $217. The previous increase that steeply was in the transition from 2016 to 2017. Though these are sharper than average increases, they are still overwhelmingly modest.
Part D is the Federal Prescription Drug Program. This program, through clunky, has filled a void for some time now where there used to be no solid coverage. Their catastrophic limits to prescriptions are much needed.
Part D Deductible
The Part D Deductible threshold can increase annually, and most years, it does. From 2020-2021 it went from $435 to $445. Keeping in sync with the higher increase trends of Part B variables, the Part D deductible is estimated to increase to $485 per calendar year. That is a $40 annual deductible increase. Here is probably the one that will produce the most backlash for us as Medicare educators.
Part D Catastrophic Threshold
The Part D Catastrophic Threshold is a crucial variable that sets the amount of drug expense one would have to incur before qualifying for catastrophic drug coverage (which covers 95% of the cost of any prescription). In 2021 this figure is $6,550, but in 2022 it is estimated to increase to $7,050. That is also a troubling change because drug cost for 19% of our Medicare Aged population is disproportionately out of control.
2022 Medicare premiums and 2022 Medicare deductible estimates with other cost controls must go up, as will the taxes for this system. Our Medicare aged population gets higher every day, and it’s an expensive toll on an already strained program. There are many factors as to what has to happen to keep the program solvent, and things like the increase in Part C enrollment and volume of taxpayers, in general, offset some of the expense increase. Still, premium increases are one factor that gets absorbed by the one group of people that can often not afford much more than they already are.
If you need help qualifying for extra assistance or trying to reduce your cost of the 2022 Medicare premium and 2022 Medicare deductible estimates, we are here to help!