If you’re tired of seeing the rising prices at the grocery store, at the car dealership and about every place imaginable, retirees are in for another shock by way of a price surge in their Medicare Premiums for 2022.
The Centers for Medicare & Medicaid Services (CMS) announced last week the Parts A & B premiums, deductible and co-insurance amounts and the numbers were a little shocking. While premiums for Medicare are usually adjusted annually (but not always), the 14.5% increase in prices for 2022 is by far the largest increase retirees have seen.
There are a number of reasons for the elevated increase – with Covid, of course, leading the charge. The increased cost of healthcare attributed to the pandemic coupled with Congress limiting increases in 2021 has led the way as the driving force behind the double-digit increase.
CMS also needs a healthy reserve for unanticipated drug costs for new drugs that may be on the way to FDA approval. One such drug is a new Alzheimer’s drug that may be available to the public in the future, but with a hefty cost. 
Another thing retirees need to keep in mind is how their Adjusted Gross Income (AGI) affects their premiums. The bands for Medicare participants are much tighter than the income bands established for ordinary income tax. The Part B premiums for 2022 will be based on income for 2020 as follows:
|If your yearly income in 2020 (for what you pay in 2022 was:||You pay each month (in 2022)|
|File individual tax return||File joint tax return||File married & separate tax return|
|$91,000 or less||$182,000 or less||$91,000 or less||$170.10|
|above $91,000 up to $114,000||above $182,000 up to $228,000||Not applicable||$238.10|
|above $114,000 up to $142,000||above $228,000 up to $284,000||Not applicable||$340.20|
|above $142,000 up to $170,000||above $284,000 up to $340,000||Not applicable||$442.30|
|above $170,000 and less than $500,000||above $340,000 and less than $750,000||above $91,000 and less than $409,000||$544.30|
|$500,000 or above||$750,000 or above||$409,000 or above||$578.30|
While we can’t predict where certain prices will be going in the future, one thing we can probably bank on is that Medicare premiums won’t be going down. Talking to an advisor at Baird Retirement Management may help you strategize on how to analyze and adjust your income in order to pay the lowest premium you can. Call us today.Robert W. Baird & Co. Incorporated does not offer tax or legal advice.  https://www.cms.gov/newsroom/press-releases/cms-announces-2022-medicare-part-b-premiums