The Centers for Medicare and Medicaid Services has increased Medicare Part B premiums, deductibles and coinsurance for next year in what will be a significant hike.
The standard monthly premium for Medicare Part B enrollees will be $170.10 for 2022, an increase of $21.60 from $148.50 in 2021. This represents a 14.5% increase. The annual deductible for all Medicare Part B beneficiaries will be $233 in 2022, an increase of $30 from the annual deductible of $203 in 2021.
CMS attributed the increases in part to rising prices and utilization across the healthcare system, which it said is driving higher premiums year-over-year alongside anticipated increases in the intensity of care.
The agency also cited additional contingency reserves due to the uncertainty regarding the potential use of the Alzheimer’s drug Aduhelm by people with Medicare.
CMS officials stressed that the 14.5% in Part B premium increase will be offset by the Social Security cost-of-living adjustment (COLA) of 5.9%, or an average of $71.40 per recipient, according to AARP. This is the largest Social Security increase in 30 years. Most Social Security recipients have their Part B premiums deducted from their Social Security benefits and will still see a net increase in their monthly check.
In July 2021, CMS began a National Coverage Determination analysis process to determine whether and how Medicare will cover Aduhelm and similar drugs used to treat Alzheimer’s disease. As that process is still underway, there is uncertainty regarding the coverage and use of such drugs by Medicare beneficiaries in 2022.
While the outcome of the coverage determination is unknown, CMS maintained that its projection does not imply what the coverage determination will be. But the agency said it has to plan for the possibility of coverage for the high-cost Alzheimer’s drug, which could, if covered, result in significantly higher expenditures for the Medicare program.
CMS also highlighted recent Congressional action to significantly lower the increase in the 2021 Medicare Part B premium, which CMS said resulted in the $3 per-beneficiary per-month increase in the Medicare Part B premium – which would have ended in 2021 – being continued through 2025.
The agency is also raising deductibles for Medicare Part A. The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,556 in 2022, an increase of $72 from $1,484 in 2021. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.
In 2022, beneficiaries must pay a coinsurance amount of $389 per day for the 61st through 90th day of a hospitalization ($371 in 2021) in a benefit period, and $778 per day for lifetime reserve days ($742 in 2021). For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $194.50 in 2022 ($185.50 in 2021).
WHAT’S THE IMPACT?
Medicare Part A covers inpatient hospital, skilled nursing facility, hospice, inpatient rehabilitation and some home healthcare services. About 99% of Medicare beneficiaries do not have a Part A premium, since they have at least 40 quarters of Medicare-covered employment.
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. Each year the Medicare Part B premium, deductible, and coinsurance rates are determined according to the Social Security Act.
Medicare Open Enrollment for 2022 began on October 15 and ends on December 7. During this time, people eligible for Medicare can compare 2022 coverage options between Original Medicare and Medicare Advantage, and Part D prescription drug plans.
THE LARGER TREND
CMS extended the open enrollment period by 30 days in September. It also expanded services provided by federally-facilitated marketplace navigators – experts who help consumers, especially those in underserved communities, understand their benefits and rights, review options and enroll in marketplace coverage.
CMS’ stated goal in initiating these steps is to make it easier for consumers to sign up for affordable health coverage and to reduce health disparities in various communities nationwide.
According to CMS data, about 8.3 million people selected individual market plans through the marketplaces using the federal platform during the 2021 open enrollment period.
This total enrollment is nearly the same as enrollments during the 2020 open enrollment period, despite the fact that New Jersey and Pennsylvania transitioned to state-based exchange platforms starting with the 2021 open enrollment period.