Understanding Parts of Medicare in 2022

What You Should Know About the Different Parts of Medicare in 2022

The year 2022 has rung in some major changes to the four parts of Medicare: Parts A, B, C and D. For one, Part B has experienced a historic increase in premiums. Meanwhile, Parts C and D have introduced enhanced plans capping insulin costs. Read on to learn more.

What you’ll learn:

Changes to Part A: Rising deductibles & coinsurances	Jump to
Changes to Part B: Increasing premiums	Jump to
Changes to Part C: More plans with higher star ratings and lower premiums	Jump to
Changes to Part D: Increasing premiums, deductibles and limits	Jump to

Medicare Part A

Medicare Part A covers expenses related to inpatient hospital stays, skilled nursing facilities, inpatient rehabilitation, and some home healthcare services. An overwhelming majority – an estimated 99% — of Medicare beneficiaries do not pay a premium for Part A because they have accumulated at least 40 quarters of Medicare-covered employment.ⁱ

Part A in 2022: Rising deductibles & coinsurances

In 2022, Medicare beneficiaries will pay a deductible of $1,556 for a hospital admission. That is an increase of $72 from $1,484 in 2021ⁱⁱ.

That amount is meant to cover a beneficiary’s percentage of costs during the initial 60 days of Medicare-covered hospitalization or the initial 20 days of skilled nursing facility care in a single benefit period.

In addition to increasing deductibles, coinsurances are rising as well: ⁱⁱ

• Hospitalization days 1 – 60: Remains at $0.
• Hospitalization days 61 – 90: $389 per day, an increase from $371 in 2021.
• Hospitalization days 91+: $778 per “lifetime reserve” day, an increase from $742 in 2021
• Skilled nursing facility care days 1-20: Remains at $0
• Skilled nursing facility care days 21 – 100: $194.50 per day, up from $185.50 in 2021.

All together, these changes add up to an additional $135 in Part A deductibles and coinsurances in 2022.

Although most Medicare beneficiaries don’t pay a premium for Part A, those who do will also see higher costs. Part A premiums start at $499 a month in 2022, up from $471 a month in 2021. ⁱⁱ

Medicare Part B

Medicare Part B covers expenses related to physician services, outpatient hospital services, certain home health services, durable medical equipment and certain other medical and health services not covered by Part A.

The Social Security Act and your modified adjusted household income determine premium, deductible and coinsurance rates on a yearly basis. The Social Security Office will pull your last two years’ tax returns to determine what you’ll pay for Parts B and D.

Part B in 2022: Increasing premiums

In 2022, the standard monthly premium for Part B will be $170.10, a jump of $21.60 from $148.50 in 2021. All beneficiaries will be subject to a $233 annual deductible, a $30 increase from $203 in 2021. ⁱⁱ

These increases may be attributed to:

• Healthcare system price increases and higher usage.
• Legislative action to lower the increase in the Part B premium for 2021,
• Uncertainty around the potential costs of Aduhelm, an Alzheimer’s Disease drug.

Medicare Part C

Also known as Medicare Advantage, Part C plans are offered by private Medicare-approved companies and offer your Part A and Part B coverage in full. Most Medicare Advantage plans also include prescription drug coverage (Part D) and may also provide additional coverage such as dental, vision, hearing, and health and wellness programs.

Medicare Advantage plans vary in terms of out-of-pocket costs and carry different regulations when it comes to services. For example, some require you to use only in-network providers or get a referral to see a specialist. These rules can also fluctuate from year to year.

Part C in 2022: More plans with higher star ratings and lower premiums

Beneficiaries can expect to see several positive changes to Medicare Advantage in 2022:

• Increase in plan availability
• Decrease in average monthly premium
• Increase in average star rating

A record 3,834 Medicare Advantage Plans will available this year, an 8% increase from 2021. It’s estimated that 59% of those plans will offer $0 monthly premiums. Including $0 premium plans, the average premium is estimated to be $19 a month in 2022, down from $21.22 per month in 2021.ⁱⁱⁱ

Plan availability increases also affect Medicare Advantage dual eligible special needs plans that cover both Medicare and Medicaid services. In 2022, dually eligible beneficiaries will have access to 295 plans, up from 256 in 2021.ⁱⁱⁱ

In addition to increases in plan availability and decreases in premiums, the average star rating for Medicare Advantage pans that include prescription drugs in 2022 is 4.37 out of 5, compared to 4.06 in 2021. Each year, the Center for Medicare & Medicaid Services (CMS) assigned every Medicare advantage plan a star rating. These ratings are based on the plan’s quality of care and customer satisfaction.

Medicare Part D

Medicare Part D addresses costs related to prescription drugs. Monthly premiums are income-based. Keep in mind that Part D premiums fluctuate from plan to plan – and each state may have 20 or more plans from which to choose. Most of these plans begin at $10 to $15 per month. This year, roughly 8 percent of high-income beneficiaries are impacted by monthly adjustment amounts.

Part D in 2022: Increasing premiums, deductibles and limits

The projected 2022 Part D monthly premium will average $33, an increase from $31.47 in 2021. You can also expect to see increases in deductibles, coverage limits and out-of-pocket thresholds.

• Part D maximum annual deductible: Up to $480 per year, up from $445 in 2021.
• Initial coverage limit: $4,430, up from $4,130 in 2021.
• Out-of-pocket threshold for catastrophic coverage: $7,050, up from $6,550 in 2021.

On a more positive note, insulin users can expect to see lower prescription costs. It’s estimated that 2,159 prescription drug plans will participate in the Part D Senior Savings Model for 2022. This model is designed to provide beneficiaries with new choices of plans that offer insulin at an affordable and predictable cost. Plans taking part in this model charge no more than $35 for a one-month supply of insulin.^iv The same applies to Medicare Advantage Plans offering Part D coverage.

The Bottom Line

Familiarizing yourself with the parts of Medicare will better help you decide which choices work best for your personal situation. Medicare Parts and Plans can change annually. It’s important to get the most up-to-date information possible when doing your research. Remember, what works for your friend or family member may not be the best choice for you.

If you’re struggling to determine what type of Medicare coverage will work for you, speak with an expert. We have licensed insurance agents ready to help you through each step of the process.