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How Much Does Medicare Cost in 2022?

Written by 
Molly Burford

Article at a glance

  • Medicare costs change annually. This article discusses 2022 costs.

  • Medicare costs vary based on a variety of factors including other health insurance the beneficiary may have, as well as the beneficiary’s location, income, and more.

  • There are financial assistance programs available to help Americans save money.

The United States government created the Federal Medicare Program in 1965 to provide covered healthcare for Americans over age 65. Since then, costs have changed annually. This article will explain everything there is to know about Medicare costs, including 2022 pricing, payment assistance, and more.

Important Terminology to Know

There are various terms to be familiar with in order to understand the true cost of Medicare. These terms and their definitions include:

  • Premium: A premium is a monthly cost for purchasing an insurance policy. Medicare requires beneficiaries to pay a monthly Part B premium and for some Americans to pay a Part A premium.

  • Deductible: A deductible is an amount a beneficiary must pay before insurance coverage begins. Medicare Part A, Part B, and Part C, as well as Part D, have a different deductible amount that must be met.

  • Coinsurance: Coinsurance is the percentage of costs for a covered health care service that must be paid after meeting the deductible.

  • Copayments: Copayments are a fixed cost that must be paid after meeting the deductible for covered health care services. 

  • Benefit period: The way Original Medicare gauges a beneficiary’s hospital usage.

  • Out-of-pocket expenses: Costs that must be paid solely by the beneficiary.

  • Out-of-pocket maximum: The total amount beneficiaries are expected to pay out-of-pocket prior to insurance starting to cover medical services.

How Much Does Medicare Cost?

To answer the question of how much an Original Medicare plan costs is manifold. This is because Medicare has different parts. Each of these Parts has different covered services.

Part A (hospital insurance) provides coverage for inpatient services someone would receive at the hospital. Some of these services include:

  • Inpatient hospital care

  • Skilled nursing facility care

  • Nursing home care (non-custodial or long-term care)

  • Hospice care

  • Home healthcare

Part B (medical insurance) covers medically necessary outpatient care and preventive services. Some of these services include:

  • Medically necessary doctors services

  • Certain vaccines

  • Durable medical equipment (DME)

  • Clinical research

Note: See if a certain medical service is covered and how at this resource.

Part A Costs

2022 costs for Part A are provided below:

  • Premium: $274 or $499 per month (Amount depends on how many quarters a beneficiary paid Medicare taxes) 

  • Deductible: $1,556 for each benefit period

  • Lifetime reserve day: All costs

Understanding Part A Premiums 

Most Americans will be eligible to get premium-free Part A. A beneficiary will be able to get premium-free Part A coverage at age 65 if:

  • They already receive retirement benefits from Social Security or the Railroad Retirement Board (RRB)

  • They are eligible to get Social Security or RRB benefits but haven’t filed for them yet

  • Either the beneficiary or their spouse had Medicare-covered government employment

If an enrollee is under age 65, they can still get Part A without paying a premium if:

  • They have had Social Security or RRB disability benefits for 24 months

  • They have ESRD and meet certain requirements

Some Americans will not be entitled to premium-free Part A coverage. In this scenario, they would need to buy Part A. 

For those who need to purchase Part A, it will cost either $274 or $499 monthly. The amount will depend on how long either they or their spouse worked and paid Medicare taxes. For those who opt to buy Part A, they must also have Part B as well as pay the monthly premiums for both Parts.

That said, eligible Americans for Medicare do not have to buy Part A but they can still purchase Part B.

Note: Learn more about Part A premium costs and more at this resource.

Part B Costs

Projected average 2022 costs for Part B are provided below:

  • Standard Premium: $170.10

  • Annual Deductible: $233

  • Copayment and coinsurance: 20% of the Medicare-approved amount for the assignment after meeting the Part B annual deductible 

Understanding Part B Premiums

Most beneficiaries will pay the standard Part B premium amount. However, if a beneficiary’s modified adjusted gross income reported on their tax return from two years ago is above a certain amount, they will need to pay both the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA), an extra charge added to the premium payment.

Note: Learn more about Part B premium costs and more at this resource.

Prescription Drug Coverage Costs

Part D is Medicare’s coverage for prescription drugs. As a reminder, enrollment in Part D is not automatic with enrollment in Original Medicare, meaning beneficiaries need to choose a separate prescription drug plan to enroll in.

Understanding Part D Premiums

Most Part D drug plans will charge a monthly premium. For Original Medicare beneficiaries, this is in addition to the Part B premium payment. For those enrolled in a Medicare Advantage (Part C) or a Medicare Cost Plan that includes drug coverage, the monthly premium for those health plans may already include an amount for drug coverage.

Beneficiaries can have their Part D premiums automatically deducted from their monthly Social Security or RRB payment. Interested parties should contact their insurance plan to enroll in automatic deductions.

Part D premiums and additional fees are dictated by income. Learn more about premiums costs for Part D at this resource.

Note: Learn more about picking the best Part D plan by visiting this resource.

How Much Does a Medicare Advantage Plan Cost?

Medicare Advantage plans, also known as MA plans, are plans provided by private insurance companies. Essentially, MA plans are enhanced versions of Original Medicare, meaning these types of health plans provide both Medicare Part A and Medicare Part B along with additional benefits such as coverage for vision, dental, and hearing. Many Medicare Advantage plans also include prescription drug coverage.

An MA plan’s cost will depend on the specific health insurance plan chosen. However, regardless of the MA chosen, one will still need to pay the Part B monthly premium and may have to pay additional Medicare premiums depending on the plan selected.

How Much Does a Medigap Plan Cost?

Medigap is known as Medicare supplement insurance. This means that Medigap policies are supplemental insurance plans that aim to fill in the gaps” of Original Medicare. This means that a Medigap plan will help pay for out-of-pocket costs for health care, such as premiums, coinsurance, copays, etc.

Each individual insurance company that offers Medigap policies will set the policy’s monthly premium cost. On that note, Medigap plans will vary quite widely in regards to how much each one will cost.

Note: Find and compare Medigap plans at this resource.

Financial Assistance Programs

Health care costs can add up quickly due to out-of-pocket costs. There are a number of ways to get cost assistance and save money on Medicare.

Medicaid Dual Eligibles

Medicaid is a state-government-run health insurance program created for low-income adults, children, pregnant women, elderly adults, and people with disabilities. This program can help lower medical expenses.

Some Medicare beneficiaries are eligible for both Medicare benefits and Medicaid benefits, a program known as Dual Eligibles.

Medicare Savings Program

Medicare Savings Programs can help beneficiaries with premium payments. These programs also pay for Part A and B deductibles, coinsurance, and copayments should a beneficiary meet certain requirements.

Medicare Savings Programs vary per state. There are four types of Medicare Savings programs:

  • Qualified Medicare Beneficiary (QMB) Program

  • Special Low-Income Medicare Beneficiary (SLMB) Program

  • Qualifying Individual (QI) Program

  • Qualified Disabled and Working Individuals (QDWI) Program

Each Savings Program will have different eligibility requirements.

Note: Learn more about Medicare Savings Programs at this resource.

Program of All-Inclusive Care for the Elderly (PACE)

The Program of All-Inclusive Care for the Elderly, or PACE, is a Medicare and Medicaid program that helps beneficiaries get their healthcare within community settings as opposed to going to a nursing home or other type of facility. 

PACE covers a variety of healthcare services in addition to those included in Medicare and Medicaid benefits. PACE includes coverage for drugs as well.

PACE isn’t offered in all states and there are a number of criteria and other rules that must be followed. Learn more about PACE at this resource.

Extra Help (Part D)

Extra Help is a program to help Medicare beneficiaries with limited resources or income pay for Medicare prescription drug plan costs including premiums, deductibles, and coinsurance. 

Those who qualify for Extra Help won’t pay a late enrollment penalty when they join a Medicare drug plan. Learn more at this resource.

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) is is a program that provides monthly payments to adults as well as children with a disability who have income and other resources below certain financial thresholds. Learn more about how SSI works with Medicare.

In addition to visiting the federal government website for the U.S. Centers for Medicare & Medicaid Services as well as the official website for Medicare, there are a number of other helpful resources to help navigate Medicare coverage and associated costs:

Sources

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