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Overview

At Medicare, we understand that one of the main concerns our customers have is how much their coverage is going to cost. Many are surprised to learn that Medicare is not free. However, we are here to help make the process of estimating your costs as easy as possible.

In this article, we will give you a quick overview of the premiums, deductibles, and coinsurance for Medicare in 2022. We hope that this information will help you better plan for your future. 

Medicare cost for Part A in 2022

Medicare Part A is free for most people. If you have worked for 10 or more years in the United States, you have already paid for Part A through payroll taxes. (99% of beneficiaries qualify for free Part A.)

If you have to buy Part A, the cost will be around $499 per month. People with less than 40 quarters of work experience but more than 30 quarters can get a pro-rated premium of $274 per month.

To be eligible to buy Part A, you must have been a legal resident or have had a green card for at least 5 years.

If you are hospitalized, your Part A deductible will be $1,556 in 2022. This is an increase of $72 from the Part A deductible in 2021, which was $1,484. (However, if you have a Medigap plan, it will likely cover this cost for you.)

Medicare Cost for Part B in 2022

Medicare Part B premiums are based on your modified adjusted household gross income (MAGI). The Social Security office will pull your IRS tax return from two years prior to determine what you’ll pay for Parts B & D.

How much does Medicare cost at age 65? The monthly premium is set by CMS annually. The items that contribute to your modified adjusted gross income include any money earned through wages, interest, dividends from investments, and capital gains. It also includes Social Security benefits and tax-deferred pensions. Distributions from Roth IRAs and Roth 401(k)s, life insurance, reverse mortgages and health savings accounts do not count in the MAGI calculation.

If you filed jointly with a spouse, Social Security will base your premiums for each of you based on that married income. However, you will EACH pay your own Part B premium. Your premiums for Part B are always individual, not combined. Social Security simply uses your household income to determine where you fall individually in the Part B premiums chart.

Social Security will usually notify you of your next year’s premium annually in December or early January by mail. Only about 5% of all Medicare beneficiaries currently pay higher Medicare premiums due to their income.

Income-related monthly adjustment amounts (IRMAA) affect only those enrollees who have incomes above certain thresholds. If your income is above a certain level, you’ll pay higher Part B and/or Part D premiums.

 

The Medicare Cost for some people in higher income brackets went up in 2018 and 2019 due to the MACRA legislation passed a few years ago. It’s a good idea to keep an eye on these Medicare income limits in the future because they may be adjusted every few years. You can find more detailed information about IRMAA on the Social Security Administration’s website.

Medicare Cost for Part D for 2022

Just like Part B, your Medicare costs for Part D varies based on income. Your Medicare Part D Premiums for 2022 also vary by plan. Each state may have 20 or more plans to choose from.

You can find plans that start around $10 – $15/month in most states. Whatever the premium is for your plan, that is known as the base premium for Part D.

You will pay the plans published base premium unless you are in a higher income bracket. People with higher incomes pay more for Part D. It’s important to factor this in if you are comparing the potential costs for Medicare Part D against other insurance, such as employer insurance.

To determine your Medicare cost for Part D drug plans in 2022, review the table below.

 

2022 Medicare Part D IRMAA chart

If you find yourself in a higher income bracket because your earlier tax returns showed higher income than you now have after retirement, be sure to read our blog post on how to appeal a higher premium.

You can learn more about Medicare Part D costs on this page.

The cost of Medicare will differ depending on your income and the type of supplemental coverage you have. For instance, if you have base Part B coverage with a monthly premium of $170.10, plus a Medigap Plan G premium of $125/month and a Part D premium of $27/month, your total would be $322.10/month in premiums. However, with this example you would have minimal additional out-of-pocket spending as Plan G would cover most of your expenses. There are many different Medicare plan options available so that you can find one with a monthly premium that fits your budget.

For most people, the Part B monthly premium in 2022 will be $170.10. This is the standard premium that most people pay based on income. Social Security will deduct your Part B premium from your Social Security check monthly. If you have not enrolled in Social Security income benefits yet, they’ll bill you quarterly.

However, some people pay more based on income. The tables below show the amount you will pay in 2022 for Part B, per the preview notice released by the Department of Health and Human Services in November.

This information is important for seniors to know so they can plan their budget and health care needs accordingly. With this knowledge, they can have greater peace of mind and enjoy their retirement years more fully.

Some people who receive Social Security benefits will pay less than $170.10 in 2022. This affects around 2 million Medicare beneficiaries. Law prevents the cost of Medicare Part B from increasing more than the Social Security annual cost-of-living increase.

In recent years, we have had low COLA increases, so these individuals have only been paying less than the standard base Part B premium. Though the Social Security COLA increases for the last couple of years have been somewhat larger, there is still a small group of beneficiaries being protected by the “hold harmless” provision.

You do not have to calculate this yourself. Social Security will determine your Part B premium for 2022 and notify you by mail if you exceed the Medicare income limits and must pay a higher adjusted amount.

Most Medicare beneficiaries qualify for premium-free Part A. However, the Medicare Part B premium is deducted from your Social Security check if you are receiving Social Security benefits. In 2022, the Part B premium is $170.10.

You can also request your Part D premium be deducted from your Social Security check.

If you enroll in Part B for the first time in 2022 or after, you will pay the standard Medicare Part B premium amount. If you don’t get Social Security benefits, are directly billed for your Part B Medicare premiums, or have Medicare and Medicaid, you will also pay the standard premium amount.

Your modified adjusted gross income as reported on your IRS tax return from 2 years ago may be above a certain amount. If so, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium.

Yes, when you start receiving Social Security benefits, your Medicare premiums will be deducted from those payments each month. This is usually just the Part B premium since most people don’t pay anything for Part A. So, be sure to factor that in when you’re budgeting for retirement.

Medicare premiums can be deducted as part of your medical expenses. This means that a portion of your income won’t be taxed.

It’s always a good idea to consult a tax professional for guidance before deducting Medicare premiums or any other medical expenses.

How Much Will Medicare Cost YOU?

As people age, they become eligible for Medicare. This is a health insurance program run by the government that provides coverage for seniors. Medicare premiums can increase every year, which can be confusing for people on a fixed income. Our team of professionals can help you understand your potential costs and plan for the future. We can also help you apply for Medicare. Call us today or complete our online form to get started.

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