Medicare Premiums for 2022

The markets love to climb a wall of worry!  Uncertainly has proven to be a good time to put money to work.  How about now?

The news has quickly shifted from Inflation/Interest Rates, to the Covid Omicron Variant.  It didn’t take long for the market to drop 2% last Friday on the news, as the markets closed @ 1:00 on what was a rather light trading day.

Of course, we’re all concerned about the potential health implications of Omicron.

I was vaccinated in March/April of this year, and contracted the Covid Delta Variant during the summer.  The symptoms were somewhat mild, however pretty darn long-lasting.  For me, it’s easy to see how this can spread and set our economy backwards.  I’m hoping Omicron is not serious and the attention does turn back to Inflation/Interest rates.

Over the weekend and today, Black Friday sales are being reported.  Brick & Mortar stores witnessed much greater floor traffic than 2020, however much lower than 2019 pre-Covid.  Online sales didn’t grow as anticipated.  I tend to believe that seasonal retail shopping started much earlier this year.  When the final numbers are in, the overall results should be market pleasing.

Markets Last Week

Last week, all major stock indexes retreated as the Dow lost (1.95%), the S&P 500 (2.18%), the Nasdaq Composite (3.52%) and the Russell 2000 (4.13%).

Foreign stocks followed suit, dropping (3.71%) and Emerging Markets losing (3.61%).  Emerging markets are one of the only major broad market indexes down for the year (3.2%).

The 10 Year US Treasury yield dropped in the flight to safety, finishing the week with a yield of 1.49%.

Medicare Premiums for 2022

On November 12th, premiums, deductibles, and coinsurance amounts were announced for Medicare Part A & Part B, along with those wonderful Income Related Monthly Adjustments.

Next year, the Part B (medical services) premium will increase to $170.10/month… a $21.60 increase.  Significant from a percentage standpoint.  The deductible for Part B will increase $30 – to $233 for the year.

Why the significant increase in Part B?

  • Higher prices and increased utilization in 2021
  • Congressional action was taken in 2021 to lower prices that is now being paid back. $3.00 of the monthly increase is attributable. You can expect to have $3.00/monthly increases from the Congressional Action through 2025.
  • The Alzheimer’s drug, Aduhelm, has been approved for Medicare patients. The use is still uncertain, however Medicare is anticipating much higher costs
  • Many Medicare beneficiaries postponed procedures in 2020 for 2021.

Keep in mind, Medicare beneficiaries pay 25% of the actual Part B cost.  The other 75% is from taxes.

The income related monthly adjustment levels have increased.  Individuals whose Modified Adjusted Income is less than or equal to $91K will not pay the higher IRMA charge.  Couples filing a joint return have a Modified Adjusted Income limit of $182,000.  This is a huge area of concern for approximately 6 to 7% of those on Medicare, who are paying significantly more for their healthcare.  Please feel free to reach out to discuss your situation.  In some cases, there are ways to reduce this cost, especially if you have a life changing event, such as retirement.

In a few weeks, we’ll have our annual “Medicare Quick Facts” updated. We will be sure to let you know once it is available on the blog & website! 

 

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Paul Levin CFP®, ChFC®, RICP®

Retirement Income Certified Professional®