3 ways to save medical insurance as premiums rise

Older Americans will face the 22nd round of economic crisis next year. Social security checks are getting bigger and bigger, but medical insurance costs are also rising.

By 2022, monthly Medicare Part B premiums will soar by US$21.60—the largest year-on-year increase in federal program history.

We have suggestions on how to mitigate the blow.

Medical insurance costs are rising in 2022

By 2022, the new Part B premiums will cost beneficiaries US$170.10 per month, up from US$148.50 in 2021. This increase is twice what experts expected last month.

Nearly one in five Americans may be affected by the increase in health insurance. In 2020, the largest federal healthcare plan in the United States covers 61.2 million people 65 years of age and older, as well as some young people with long-term disabilities—accounting for 18.5% of the U.S. population.

Medicare Part B is the basic part of the federal insurance plan, covering medical treatment, outpatient surgery, medical equipment, etc. It charges beneficiaries a monthly insurance premium, which has been rising steadily since 2000. (At the time, it was only $46 per month.)

But this year’s interest rate hike is the largest one-year increase in medical insurance’s 56-year history. In contrast, Part B premiums only increased by $3.90 last year.

Medicare recipients are being squeezed in other ways.

Part B deductibles—the fees that participants pay out of their own pockets before Medicare starts paying their shares each year—will also increase by $30 next year.

The deductible for Part A will also be higher. Part A of the medical insurance mainly covers hospitalization and professional nursing facilities.

Overview of medical insurance costs in 2022

program cost From Increase
Medical Insurance Part B Premium $170.10 per month USD 148.50 in 2021 $21.60 per month
Medical Insurance Part B Deductible USD 233 per year USD 203 in 2021 $30 per year
Medical Insurance Part A Deductible $1,556 per year USD 1,484 in 2021 $72 per year

Why will the cost of medical insurance increase in 2022?

The Centers for Medicare and Medicaid Services (CMS) provided several reasons for the historic high increase in Part B Press Release of November 12.

  1. Rising health care prices and increased use of the health insurance system, some of which are attributed to COVID-19 care.
  2. After Congress decided to mitigate the impact of rising prices for beneficiaries during the pandemic, Medicare Part B premiums increased by only $3 from 2020 to 2021. Congress then instructed CMS to repay the reduced premiums over time – and to recover the investment from 2022.
  3. There is a controversial new Alzheimer’s drug called Aduhelm on the market, and CMS is still deciding whether medical insurance will cover it. Complex infusion therapy is very expensive, with an estimated annual price of US$56,000. It is not clear whether Aduhelm will be approved for medical insurance, but CMS stated that it still “must plan to cover the possibility of this high-cost Alzheimer’s drug” as this may result in significant expenditures for the medical insurance plan Increase.

According to CBS News, about half of the increase in Part B premiums in 2022 is due to Aduhelm Insurance’s contingency plan.

CMS administrator Chiquita Brooks-LaSure said in a press release: “The increase in Part B premiums in 2022 continues to prove that rising drug costs threaten the affordability and sustainability of health insurance plans.”

High-income earners will pay more for medical insurance next year

Due to the monthly adjustments related to income, high-income earners will bear additional medical insurance costs in 2022.

In short, the premiums of Part B and Part D are linked to the income of the beneficiary. People with higher incomes pay more than standard Medicare premiums.

According to CMS data, only about 7% of Medicare participants pay higher Part B premiums due to income, and 8% pay higher Part D premiums.

Single filers with incomes of more than $91,000 and couples with incomes of more than $182,000 have begun to levy graduation surcharges for high-income earners.

The monthly adjusted premiums related to Part B income in 2022 will be US$238.10, an increase of US$30.20 over 2021.

At the same time, the wealthiest seniors in the U.S.—single people with incomes of $500,000 or more and couples with incomes of $750,000 or more—will face a total Part B premium of $578.30 per person per month, which is higher than that in 2021. An annual increase of $73.40.

To see a complete breakdown of the monthly adjustments related to revenue in 2022, click here.

Medical insurance costs may deplete your social security expenses

In October, social security recipients received some good news.

Annual Cost of Living Adjustment (COLA) Increase of 5.9% in 2022 — The largest COLA in the past 40 years.

This is what a normal recipient looks like:

  • On average, retired workers will receive an additional US$92 per month, bringing the average monthly benefit to US$1,657.
  • Disabled workers will receive an additional US$76 per month, bringing the average monthly benefit to US$1,358.
  • The maximum supplementary security income (SSI) benefit will increase by $47 per month, bringing the maximum monthly benefit to $841.

The increase in the cost of living on social security is related to inflation, and if you haven’t heard of it, inflation is soaring.

The increased benefits are designed to offset the rising costs of daily necessities such as food, housing and utilities.

However, Social Security COLA has historically lagged behind inflation. This year is no different.

The Consumer Price Index is the government’s indicator of price changes over time. It reached 6.2% in October, so the 5.9% COLA still falls short of the requirement.

Mary Johnson, a medical insurance policy analyst at the Senior Citizens Alliance, a non-partisan senior organization, said that considering the $21.60 per month Part B premium is higher, the extra funds in the Social Security check means less.

“Medical Insurance Part B premiums are automatically deducted from social security benefits. Therefore, once the increased premiums are deducted, the net social security benefits will not be higher by 5.9%,” Johnson said.

Johnson said those who enjoy moderate social security benefits will see most, if not all, of their pay rises swallowed up by health insurance and rising cost of living.

“The increase in Medicare Part B premiums in 2022 is causing trouble for many beneficiaries who want to know where the money will come from to pay all the bills,” Johnson told The Penny Hoarder. “Those with the lowest benefits won’t see how much is left.”

Expert tips

The Social Security Administration usually issues a mailing notice of the new benefit amount in early December-but you can now check your My social security account.

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3 ways to reduce medical insurance costs in 2022

For fixed-income seniors, these news about medical insurance costs do not bode well.

But you can take steps to reduce Medicare costs next year.

Switch to a cheaper plan during the open registration period

Medicare open registration will last until December 7. This is your annual opportunity to review current insurance and explore other plans that may be more effective and less costly.

As a quick reminder, you can get Medicare coverage in one of two ways:

  1. Original medical insurance: Including part A and part B. Managed by the federal government. Most insured persons also purchase an independent Part D drug plan managed by a private insurance company. Some people also purchase private supplementary insurance called Medigap.
  2. Medical insurance advantage: An all-in-one healthcare plan managed by a private insurance company. It bundles the benefits of Part A, Part B, and (usually) Part D.

Medical insurance provision Online plan comparison tool You can buy different Part D drug plans, Medicare Advantage plans and Medigap supplement plans here.

You will enter your zip code and any financial assistance you may receive (such as Medicaid), and the tool will show you all the plans available in your area.

If you buy a new Part D plan on the market, you can also enter your prescription drug information and select up to five preferred pharmacies to make a customized estimate of your out-of-pocket drug costs.

Expert tips

Make sure to accurately enter all medications you take in the Medicare.gov tool, including dosage, quantity, and frequency. Omitting these details may lead to incorrect cost estimates.

You can view up to three different Part D or Medicare Advantage plans side by side, and filter the results by star rating and available benefits.

The private insurance companies that run these plans change the coverage and fees every year. They may cancel the coverage of certain prescription drugs or change the pricing structure of different services.

Therefore, just by sticking to the current insurance coverage, you may pay more for health care.

Before registering, be sure to carefully review the details of any plan.

If you join a Medicare Advantage plan, you still need to pay Part B premiums. Some Advantage plans to advertise and pay part of the Part B premium in the form of “rebates.”

This may sound tempting—especially the premiums for Part B are rising.

But tread carefully. Not all regions provide feedback benefits. Even so, you will be restricted to the local doctor network, and you need to consider other out-of-pocket expenses, such as deductibles. Some Medicare Advantage plans that offer Part B relief may not include prescription drug coverage.

You can use the Medicare plan finder tool and view the detailed information page of each plan to find Medicare Advantage plans with rebate benefits. However, it may be difficult to find the exact reduction. You may need to read through the plan documents or call the plan provider.

Check if you are eligible for the Medicare savings plan

Older Americans with low incomes are eligible for financial assistance under the Medicare Savings Plan (MSP).

These plans help millions of people pay for Medicare premiums and may also cover your deductibles, coinsurance, and co-payments if you meet the eligibility requirements of your state.

According to CMS, currently only about half of medical insurance beneficiaries who qualify for MSP have participated in one. This makes sense-registering for these programs can be confusing and difficult.

Expert tips

Visit to learn more about MSP, including income restrictions and eligibility requirements This page On Medicare.gov.

Medicare also offers a prescription assistance program called Extra Help for beneficiaries with limited income and resources.

If you qualify and join Extra Help, you are guaranteed that you will not pay more than $3.95 for each generic drug, or that you will not pay more than $9.85 for each brand of covered drug.

To see if you are eligible for additional help and start applying, click here.

Talk to well-trained non-profit volunteers

Comparing different Medicare plans and choosing the one that suits you is very time consuming. But as registration opens on December 7, time is of the essence.

Fortunately, there is a non-profit organization that can help.

It is called State Health Insurance Assistance Program (SHIP), although some states have given it a different name (for example, SHINE in Florida or SHIBA in Idaho).

Each SHIP is made up of a network of well-trained volunteers who provide one-on-one consultations on Medicare benefits.

The plan has nothing to do with insurance companies or health plans, so the advice you receive is free and fair. No one will try to sell you something or bomb you with annoying phone calls.

In addition, any medical insurance beneficiary can use the plan because there are no income restrictions or restrictions.

First, please call the SHIP information hotline in your state (click “SHIP locator” on the organization’s homepage to get a list of phone numbers for each state).

You will establish contact with SHIP volunteers who can help you compare plans, answer your questions, and even help you participate in the Medicare savings plan if you are eligible.

Rachel Christian is a certified personal finance educator and a senior author of The Penny Hoarder.

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