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Federal Government Announces Huge Increase in Medicare Premiums

Medicare Premiums
Federal government announced a huge increase of Medicare Premiums. (Photo: The Heritage Foundation)

The federal government announced a significant increase in Medicare rates on Friday night, blaming the pandemic as well as “uncertainty” about how much it could have to pay for an expensive and divisive new Alzheimer’s medicine.

Medicare

Federal government announced a huge increase of Medicare Premiums. (Photo: The Heritage Foundation)

Increase of Medicare Premium in 2022

In a recently published article in MSN News, monthly payments for people in the lowest income category will rise from $148.50 this year to $170.10 in 2022 due to a 14.5 percent increase in Part B premiums. Physician services, outpatient hospital services, some home health services, medical equipment, and certain other medical and health services not covered by Medicare Part A, such as drugs administered in physicians’ offices, are all covered under Medicare Part B.

Meanwhile, the Centers for Medicare and Medicaid Services downplayed the increase, pointing out that most seniors also get Social Security benefits and would see a 5.9 percent cost-of-living adjustment in their monthly payments in 2022, according to a statement from the agency. This is the biggest increase in 30 years.

CMS said that the rise in the COLA will more than cover the increase in the monthly Medicare Part B premium. The majority of Medicare recipients will receive a considerable rise in their Social Security income. After the Medicare Part B payment is subtracted, a retired worker who presently earns $1,565 per month from Social Security should anticipate receiving a net increase of $70.40 per month, according to a report published in CNN News.

Medicare Premiums Increased at a Faster Rate

Mary Johnson, a Social Security and Medicare policy analyst for The Senior Citizens League, an advocacy group said that it will comprise the whole yearly cost of living adjustment (COLA) of Social Security claimants with the lowest benefits, which is around $365 per month. Higher-income Social Security beneficiaries should be able to handle the $21.60 per month increase, but they may not have as much money left over as they expected.

According to the league, Medicare premiums have historically climbed at a far quicker pace than Social Security’s yearly increases. Inflation, which is also growing at a strong pace, will take away a large portion of the rise in Social Security payments in 2022.

CMS stated that part of the rise for 2022 was due to uncertainties over how much the agency would end up spending to treat beneficiaries with Aduhelm, an Alzheimer’s medicine authorized by the US Food and Drug Administration in June despite the agency’s experts’ concerns. According to some estimates, it will cost $56,000 per year. On a case-by-case basis, Medicare is considering whether or not to pay for it right now.