Each year Medicare implements changes. These changes can include new costs and benefits for the year. The costs for 2022 were quite a shock to many beneficiaries as the increase was more than predicted. The cost of Medicare is just one topic you need to know when understanding Medicare. You will also want to know when to apply, what coverage you need, and how Medicare works. Navigating through Medicare can be challenging, especially for those who have been on employer coverage since the beginning. For those new to Medicare, here is what you need to know about Medicare in 2022.
Medicare Costs
Most people will qualify for premium-free Part A when they become eligible for Medicare. As long as you have paid Medicare taxes and worked at least ten years in the U.S., you will pay $0/month for Part A. You can also qualify through your spouse’s work history if you do not have enough work credits.
Medicare Part B Costs
However, everyone will pay for Medicare Part B. The standard monthly premium is $170.10 in 2022. You will want to keep in mind that you may pay more for Part B if you are in a higher income bracket. Social Security will look at your modified adjusted gross income from two years before to determine what you will pay this year for Part B. If you are above a specific amount, you will pay more. This is called the Income Related Monthly Adjustment Amount (IRMAA). You can appeal IRMAA if you qualify for a life-changing event.
How to Pay Your Part B premium
If you are receiving Social Security benefits, your Part B premiums will be deducted each month from your check. However, you will receive a bill for your Part B premium when you are not receiving Social Security benefits. Typically, it is a quarterly bill. If you don’t want to pay quarterly, you can set up Medicare Easy Pay to pay monthly, which will be deducted from a bank account.
When to Apply for Medicare
Every Medicare beneficiary has an Initial Enrollment Period (IEP) window. It is a 7-month window that starts three months before your 65th birthday month and ends three months after. You can apply for Medicare Part A and Part B during this window. So, if you are not covered by creditable coverage, you will want to apply for Medicare during this time. Your coverage will start on the 1st of your birthday month if you apply for Medicare during the first three months. However, if you apply three months after your 65th birthday month, your coverage will be delayed.
Additionally, if you receive Social Security benefits for at least four months before your 65th birthday month, you will be automatically enrolled in Medicare.
Creditable Coverage from a Large Employer
If you or your spouse is actively working for a large employer with 20 or more employees, you can delay Medicare past your IEP. You will qualify for a Special Enrollment Period (SEP) when you lose coverage or employment. Your SEP is an 8-month window. If you fail to enroll in Medicare during this window, you will begin to accrue a late enrollment penalty.
Non-Creditable Coverage
Coverage that is not considered creditable for Medicare includes small employer group plans (less than 20 employees), retiree health plan, Affordable Care Act plan, VA benefits, Tricare for Life, and COBRA. If you don’t enroll in Medicare when you are first eligible and have one of these plans, you will accrue the late enrollment penalty and pay that penalty when you apply in the future.
Medicare Coverage in 2022
Original Medicare comprises two parts, Part A and Part B. Part A will be your inpatient hospital coverage. Part A also includes hospice care, some medications, skilled nursing facility care, and home health care.
Part B is your outpatient medical coverage such as doctor visits, physical therapy, lab work, surgeries, procedures, and more.
However, Medicare does not cover the cost of these services at 100%, so you may consider enrolling in a Medicare Supplement or Medicare Advantage plan. Additionally, you will want a Medicare Part D plan for prescription drug coverage. These plans may have an additional premium that you will pay on top of your Part B premium.
Conclusion
Each situation is different, so you will want to start your research early to know when you need to apply if you can delay Medicare, what additional plans you will need, and how much you will pay. It can be overwhelming going through the details, but licensed Medicare brokers can help!