As Social Security Rises, So Do Medicare Premiums
As Social Security Rises, So Do Medicare Premiums
Following the Social Security Administration's recent cost of living adjustment announcement of 5.9% for 2022, the Centers for Medicare & Medicaid Services (CMS) announced Medicare Part B premiums for 2022 will increase from $148.50 a month in 2021 to $170.10 a month in 2022, a base premium increase of 14.5%. Part D premiums for Medicare drug coverage also increased based on income.
The following table shows the income-related monthly adjustment amounts (IRMAA) for 2022 Part B and Part D premiums. Keep in mind that these amounts are based on your filing status and yearly income in 2020. If your income is significantly lower than it was in 2020 due to a life-changing event (divorce, death of spouse, work reduction, etc.) use Form SSA-44 to request a reduction in your income-related monthly premium.
| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Beneficiaries who are married and lived with their spouses at any time during the year, but who file separate tax returns from their spouses, with modified adjusted gross income: | Income-related monthly adjustment amount | Total monthly Medicare Part B premium amount | Medicare Part D Income-Related Monthly Adjustment Amounts |
| Less than or equal to $91,000 | Less than or equal to $182,000 | Less than or equal to $91,000
| $0.00 | $170.10 | +$0.00 |
| Greater than $91,000 and less than or equal to $114,000 | Greater than $182,000 and less than or equal to $228,000 | $68.00
| $238.10 | +$12.40 | |
| Greater than $114,000 and less than or equal to $142,000 | Greater than $228,000 and less than or equal to $284,000 | $170.10
| $340.20 | +$32.10 | |
| Greater than $142,000 and less than or equal to $170,000 | Greater than $284,000 and less than or equal to $340,000 | $272.20
| $442.30 | +$51.70 | |
| Greater than $170,000 and less than $500,000 | Greater than $340,000 and less than $750,000 | Greater than $91,000 and less than $409,000 | $374.20
| $544.30 | +$71.30 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | Greater than or equal to $409,000 | $408.20
| $578.30 | +$77.90 |
Beware The Tax Torpedo
The $1 difference for individuals earning between $91,000 and $91,001 means an additional $964.80 Medicare tax. Likewise, couples earning between $182,000 and $182,001 are subject to an increase of $1,632. For more on this topic be sure to read, "How To Avoid Paying Higher Medicare Premiums The First Two Years After Retiring."
What If You Don't Choose Medicare Part D
Medicare Part B premiums are a standard deduction from Social Security checks to cover physician office visits, outpatient hospital services, durable medical equipment, home health care, and certain preventive services. Medicare Part D for drug coverage is optional. However, if you choose not to sign up for Part D when first eligible, you may have to pay a Part D late enrollment penalty if not covered by another drug plan. Also, keep in mind that even if your retirement plan pays for your Part D plan premiums, high-income earners are required by law to pay the Part D IRMAA. If you don't pay the Part D IRMAA, you may also lose your retirement coverage, and you may not be able to re-enroll.
Eligible Medicare participants can compare 2022 coverage options for Original Medicare, Medicare Advantage, and Part D prescription drug plans during Medicare Open Enrollment for 2022, which began on October 15, 2021, and ends on December 7, 2021.
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