Medicare

How Much Will Medicare Cost in 2022?

How Much Will Medicare Cost in 2022?

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For all Medicare plans, costs will vary depending on what plans you decide to purchase, the company you purchase your plan from, your income and sometimes your age. For this reason, you should carefully balance your coverage needs and the costs of the plans when choosing the right mix of Medicare policies.

How much does Medicare cost?

The total cost of Medicare for you will depend on what parts and plans you select for your coverage. Even though costs vary, below is an overview of what many people typically pay for each part of Medicare.

Medicare plan
Typical monthly cost
Part A (hospital)$0
Part B (medical)$170.10
Part C (bundle)$33
Part D (prescriptions)$42
Medicare Supplement$163

Medicare Part A cost

  • Monthly cost: Usually free
  • Annual deductible in 2022: $1,556

According to the Medicare program, 99% of enrollees get Medicare Part A for free. Those who do not qualify will pay between $274 and $499 per month in 2022, with the exact amount based on how much they or their spouse have paid in Medicare taxes.

Medicare Part A costs nothing for most enrollees due to their previous participation in the workforce. If you have worked for more than 10 years or 40 quarters, then you are eligible to pay $0 for Medicare Part A. This is because, during your working years, you contributed to Social Security and Medicare payroll taxes.

A large cost for Medicare Part A is the deductible, which is the amount you have to pay for medical care out of pocket before the plan's benefits begin.

For 2022, the Medicare Part A deductible is $1,556. That's a $72 increase from 2021. However, this cost is usually covered if you enroll in a Medigap policy or Medicare Advantage.

Cost of Medicare Part B

  • Standard cost in 2022: $170.10 per month
  • Annual deductible in 2022: $233

For most people, the cost of Medicare Part B for 2022 is $170.10 per month. This rate is adjusted based on income, and those earning more than $91,000 will pay higher premiums.

For high-earners, the cost of Medicare Part B is based on your adjusted gross income (AGI) from your previous year's taxes. Only about 7% of enrollees will pay these higher rates, and below you can find an exact breakdown of the different income thresholds for Medicare Part B premiums. If you file joint taxes, then you can double these income levels to figure out what your monthly Part B premium would be. These figures are updated annually by the Social Security Administration (SSA).

Individual income
Monthly premium
$91,000 or less$170.10
$91,001-$114,000$238.10
$114,001-$142,000$340.20
$142,001-$170,000$442.30
$170,001-$500,000$544.30
$500,001 or more$578.30

Those with low incomes can get help paying for Medicare Part B through several government programs including Medicaid, Supplemental Security Income (SSI) and the Medicare Savings Program.

Besides the monthly premium, enrollees in Medicare Part B are also responsible for paying the deductible.

For 2022, the Part B deductible is $233, which means you would need to pay $233 before coinsurance benefits would kick in.

If you have Medicare Supplement Plan C or Plan F, the supplemental policy will pay for this Part B deductible. If you have a Medicare Advantage plan, the Part B deductible doesn't apply because the plan will set its own deductible.

Medicare Part C cost

  • Average cost in 2022: $33 per month
  • Annual deductible in 2022: Varies by plan

The cost of Medicare Part C, also called Medicare Advantage, will vary depending on the health insurance plan you select. For 2022, the average cost of available plans is $33 per month.

Part C is a pure private health insurance product, meaning that costs and coverage are not standardized across companies. Every policy has different levels of coinsurance, premiums and deductibles. Therefore, you should shop around on the Medicare.gov website to find the best Medicare Advantage policy.

Typically, enrollees in Medicare Advantage can find plans as cheap as $0 per month as well as expensive plans costing several hundred dollars per month. The price range is due to differences in coverage. In addition to the premiums, potential policyholders for Medicare Advantage policies should take note of the deductibles for these plans, as they can be higher than the deductibles for other parts of Medicare.

Medicare Part D cost

  • Average cost in 2022: $42 per month
  • Typical drug deductible in 2022: $344

Costs for Medicare Part D will vary based on the plan you choose and your household income.

For 2022, available Medicare Part D plans cost an average of $42 per month. The deductible amount also varies by plan with the average drug deductible being about $344.

Those with incomes over $91,000 will also pay an additional fee on top of the plan's cost. Only about 8% of enrollees pay this Medicare adjustment amount, which is automatically deducted from the Social Security benefits of those who qualify.

Individual income
Additional monthly cost for Part D
$91,000 or less$0
$91,001-$114,000$12.40
$114,001-$142,000$32.10
$142,001-$170,000$51.70
$170,001-$500,000$71.30
$500,001 or more$77.90

For example, let's say you decided to purchase a Medicare Part D policy with a stated premium of $50 per month, and your income for the previous year was $150,000. In this case, your new income-adjusted monthly premium would be $101.70 ($50 + $51.70).

Cost of Medicare Supplement

For 2022, a Medicare Supplement plan (also called a Medigap plan) costs an average of $163 per month. However, costs will depend on two factors: the policy you choose and the pricing structure in your state.

Firstly, different plan letters have different prices since each policy provides a different level of coverage. For example, Medigap Plan G, a more comprehensive plan, costs more than Plan K, a cheaper plan with less coverage. Below are the average monthly premiums of each Medigap plan for 2022. Notice that a range is given since costs can vary.

Medigap plan
Cost
Plan A$107-$386
Plan B$151-$411
Plan C$169-$366
Plan D$139-281
Plan F$161-$410
Plan G$120-$364
Plan K$58-$135
Plan L$93-$211
Plan M$114-$239
Plan N$102-$302

Monthly premium for a 65-year-old female nonsmoker

Secondly, Medigap prices will differ based on state regulations and whether the plan can set rates based on age or health status. There are three different ways in which Medigap policies can be priced:

  • Community-rated
  • Issue-age-rated
  • Attained-age-rated

The simplest rating system is community-rated, which means the same monthly premium is charged to everyone who has the same Medigap policy. This means your premium will not be based on your age but could go up because of inflation.

Issue-age-rated has a premium structure in which your monthly premium is based on the age you are when you buy the Medicare Supplement plan. In this case, premiums will be lower for people who buy at a younger age. For example, if you bought a Medigap policy at age 65, your premium could be $200, but if you bought the same plan at 80, that policy might cost $300.

The final pricing structure is attained-age-rated, in which the monthly premium is based on your current age every year. In other words, your premium will renew every year and increase as you continue to get older. For example, you may have started paying $150 per month for your Medigap policy at age 65, but by the time you are 75, you could be paying $175 per month.

As you can see, differences in pricing structure can vastly change the amount you will pay for Medigap coverage during your lifetime. When pricing is based on attained age, costs will be lower at age 65 and will increase steadily over time. Those who have community-rated plans will see higher rates at age 65, but the cost increases won't be as severe.

Frequently asked questions

How much is taken out of your Social Security for Medicare?

For most people, $170.10 will be deducted each month from your Social Security to pay for Medicare Part B (medical insurance). This amount will be higher for those who have higher incomes. If you have a low income, there are programs to reduce your monthly Medicare costs.

Is Medicare Part A free at age 65?

Those who have worked more than 10 years get Medicare Part A for free. This hospital insurance is a benefit of having paid Medicare taxes through payroll deductions or self-employment taxes.

How much does Medicare cost each month?

The type of Medicare will determine your monthly costs. In 2022, A Medicare Advantage plan can cost an average of $33 per month. Medicare Part B usually costs $170.10 per month, and a Medicare Part D plan for prescription drugs costs an average of $42 per month.

Methodology and sources

Medicare cost, deductible and income adjustment data are from Medicare.gov and the Centers for Medicare & Medicaid Services (CMS).

ValuePenguin calculated Medicare Advantage costs based on data for 2022 plans that include prescription drug coverage. Special Needs Plans, sanctioned plans, PACE plans, prepayment plans (HCPPs) and employer-sponsored plans were excluded from our analysis. The cost for Medicare Part D is based on the average of available stand-alone prescription drug plans.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.