Commentary November 15, 2021 at 07:44 AM Share & Print
What You Need to Know
- The average monthly Social Security benefit for a retired worker is set to go up $92 in January.
- For a Medicare enrollee earning $90,000 per year, monthly Part B premiums will increase $21.60 per month.
- For a married Medicare enrollee who is a joint filer and earns $750,001 per year, the premiums will climb $170.10 per month.
Uncertainty about spending on COVID-19 and a new Alzheimer’s drug, Aduhelm, have pushed Medicare Part B program managers to increase 2022 monthly premiums up at the fastest rate since 2016.
The standard monthly premium for Medicare Part B enrollees will increase 14.5% in 2022, to $170.10, and the deductible will increase 14.8%, to $233, officials at the Centers for Medicare and Medicaid Services announced Friday.
Medicare Part B is the program that pays for physician services and outpatient care for Medicare enrollees.
CMS phases in higher levels of Medicare Part B premiums for individual enrollees who earn $91,000 to $500,000 per year and married joint filers in households that earn $182,000 to $750,000 per year.
The 2022 Medicare Part B premium for the highest-income enrollees will increase to $578.30 per month, from $408.20 per month this year.
Federal law requires Medicare Part B premiums to equal 25% of the estimated Part B costs for enrollees ages 65 and older.
Chiquita Brooks-LaSure, the CMS administrator, said in a comment included in the premium increase announcement that the agency has a commitment to keeping Medicare going.
“The increase in the Part B premium for 2022 is continued evidence that rising drug costs threaten the affordability and sustainability of the Medicare program,” Brooks-LaSure said.
The Social Security COLA
The Medicare Part B program has a “hold harmless” mechanism that can reduce or eliminate the impact of premium increases for low-income and modest-income enrollees when Social Security cost-of-living adjustments, or COLAs, are small.
In 2022, the 5.9% COLA may keep the hold harmless mechanism from helping many enrollees, because the COLA is on track to increase the monthly Social Security benefit by $92 per month, to $1,657, for the average retired worker.
The 2022 Medicare Part B monthly premium increase amounts to 23.5% of the average monthly Social Security benefit increase.
Medicare Part A
Most people with Medicare Part A hospitalization coverage get it without having to pay monthly premiums, because they or their spouses have paid for the coverage through payroll taxes.
For people who do have to pay the full price for Part A coverage, such as immigrants who buy into the program, the monthly premium will increase 8.2%, to $499.
The deductible will increase 4.9%, to $1,556.
Commercial life and health insurers have been talking in recent conference calls with securities analysts about efforts to increase 2022 prices to reflect uncertainty about how much preventing and treating COVID-19 care will cost; how much COVID-19 surges will depress spending on ordinary care; and how much COVID-19 disruption of routine care will come back to haunt us.
Medicare Part B managers say in an early version of a Federal Register notice about 2022 premiums that they included extra room for a 2022 program spending increase because of their own uncertainty about the cost of COVID-19 care, non-COVID-19 care and COVID-19 prevention.
They also note that there is uncertainty about how many enrollees will use Aduhelm, which could cost $56,000 per year.
“Depending on utilization, the potential costs for this course of treatment range from negligible to very significant,” officials say.
Pictured: Chiquita Brooks-LaSure (Photo: House Ways and Means Committee)