4 Medicare Changes for 2022 That Erase Your 5.9% Social Security Increase and 4 Ways to Overcome Them
The speculating is over! We now know what Medicare increases will affect our healthcare cost for 2022, and it’s not pretty. Here are 4 major Medicare changes for 2022 that erase your 5.9% COLA increase (cost of living allowance) and then some, and how to overcome them.
It was being touted as the most generous COLA increase in many decades, if not ever. A 5.9% increase on social security checks and government/military paychecks. In essence, for every $1,000 earned, you would receive an additional $59. With inflation as it is, this would at least match it. Your buying power would remain constant. But, who foresaw that those on Medicare (which not only includes seniors, but those on disability for 25 months or greater) would have it taken back with a whopping 14.6% increase to Medicare premiums and deductibles?
A new drug for Alzheimer’s called Aduhelm was recently approved by the FDA. In one study, it showed slowing the loss of cognition by removing plagues that kill brain neurons. It’s an expensive drug which requires a monthly injection, most likely for life.
Well, since Alzheimer’s is a disease of the aged and those people are on Medicare, CMS (Centers for Medicare and Medicaid Services) anticipates high demand and a major financial burden. Therefore, they are trying to fill their coffers with higher Medicare costs to be able to cover this new wonder drug.
One can argue this is a reasonable response. I for one agree if the drug works as promised, whoever needs it should get it. However, for the masses who do NOT need it and earn very little, they must now bear the brunt as well. It’s the law of large numbers.
While most people on Medicare Advantage and MediGap supplement plans do not pay the Part-A deductible, consider that the increase influences what insurance carriers charge for inpatient hospital copays. Currently, the deductible is $1,484 per benefit period. A benefit period is a 60-day window created on day one you are hospitalized. What this means for you is that if you are re-hospitalized, FOR THE SAME REASON, within that 60-day period, you will not pay the deductible again. However, if you are hospitalized for any other reason or it’s day 61, you will.
The increase for 2022 is $72, for a total of $1,556. This is not counting increases for daily copays for days 61 through 90 hospitalized and lifetime reserve days, nor nursing home copay increases.
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Currently, the Part-B premium is $148.50. In 2020, it was $144.60. Due to the coronavirus pandemic, congress capped the increase for 2021, and a $3.90 increase was applied. Now, the government wants to add what they didn’t take in 2021, plus the 2022 increase, totaling a whopping $21.60 for a total of $170.10 being deducted from Social Security checks.
Moreover, the Part-B annual deductible, which is currently $203, will increase by $30 to $233 for 2022. Combined, that’s a $54.60 increase in Part-B alone.
When we consider that according to The Balance, the average social security check is $1,522.70 per month, that’s a significant hit. AND THAT’S THE AVERAGE! I speak with many who receive between $800 and $1,000 per month. Imagine then having to deduct $170 for Part-B (if they are not on Medicaid or on a Medicare Savings Program). You can see how hard this can be to make ends meet.
While I won’t be elaborating on IRMAA (income-related monthly adjustment amount), for those paying an adjusted premium, they will take a serious hit with the Part-B premium being as high as $578.30 per month.
While Part-D (your prescription drug plan or portion of your Medicare Advantage plan that provides drug coverage) does not have a fixed premium (the premium is whatever the carrier charges for their respective plans), other areas were not spared.
The deductible went up from $454 annually to $480. The coverage amount increased by $300 (which is a welcomed change) to $4,430; the coverage gap, affectionately known as the donut hole, went up by $200. It will be $2,620 for 2022, with the magic number to get out of the donut hole being $7,050 spent in combination.
While we cannot avoid these changes, there are some things you can do to soften the brunt. Let’s look at some of these.
Many carriers offer at least one plan with a Part-B giveback that can range from $50 to $145, depending on your location. In essence, the plan credits your Medicare premium the amount they offer, lowering what you owe. Then Medicare will only deduct the difference. Find out if there are any available in your area. If so, see if they have your doctors and cover your prescriptions. If they do, change your plan.
Extra Help (also known an LIS – low-income subsidy) make your medication copays low and provides up to an additional $5,000 to cover your prescription costs. This is more than enough to avoid the donut hole’s $2,620 deficit. Take a look at the table below. If what you earn falls within the red lines in the table, contact your agent to apply.
A Medicare Savings Program is administered by your state’s Medicaid program. If you fall within the green columns above, you may qualify for this savings. There are some additional restrictions on resources. However, if you qualify, you will get your Part-B premium fully reimbursed and may also have your deductibles, coinsurances and copays paid for. Speak with your agent for more details.
Another option is to choose a plan that offers generous add-on benefits like:
Whether or not you’ve spoken with someone already regarding your Medicare plan for 2022, you will want to revisit it and do another assessment. Make sure you’ve exhausted every benefit you are eligible for. If you cannot stop what is taken out and what you may have to pay, make sure you have other ways to lower cost to make that money available for the increases.
If you don’t have an agent or just have questions, feel free to reach out to us here at YourCareRep.com. We will be happy to help anyway we can and provide some guidance.