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...And yet, I just read that Medicare will eat the increase. Should have remembered.
There's a lot of that notion going around. Let's walk through that.
I did this relatively quickly - please check my math. Also see Disclaimer below.
Looking ahead... If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
No definitive word yet on the Medicare Part B increase for 2022.
Looking back... In 2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
So... IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.
By law, "[t]he standard Part B premiums are set to cover 25% of projected average per capita Part B program costs for the aged, with federal general revenues accounting for the remaining amount." https://sgp.fas.org/crs/misc/R40082.pdf
However, for 2021 the law was changed so that the federal government absorbed most of the premium increase.
To ... avoid a large premium increase, Congress in the new budget law added enough money to Medicare so, according to a spokesman for House Speaker Nancy Pelosi, the Part B premium will increase only by an estimated $4 a month.
So part of the increase for 2022 would seem to be catching up to what 2021 should have been. Thus only the remainder of the 2022 increase would be due to the projected rise in medical costs between 2021 and 2022.
That may not make you feel any better, but it does help to harmonize the 2022 premium increase (whatever that turns out to be) with the small increase in medical costs over the past year.
While CMS announces original Medicare premiums in November, it has already released average increases for private Medicare insurance:
The average premium for Medicare Advantage plans will be lower in 2022 at $19 per month, compared to $21.22 in 2021, while projected enrollment continues to increase. As previously announced, the average 2022 premium for Part D coverage will be $33 per month, compared to $31.47 in 2021.
Where did you read such a report? Someone doesn't know how to do simple math or what they're writing about! NOTE: relative to Medicare premium only, not any other changes to Medicare for 2022. An example: 2021 SS monthly benefit = $2,000/month. The 2022 benefit will be $2,118 ($2,000 X 5.9%). The normal monthly Medicare premium will increase in 2022 from $148.50 to $158.50/month. 2022 SS/monthly benefit increase of $118 - $10, 2022 Medicare monthly premium increase = a net monthly SS benefit increase of $108. This is $1,296/annual.
Someone is doing too much Maui-Wowie. You need to contact whomever wrote what you read to have a re-do moment.
$1,146 is my net SS monthly, after Medicare takes their cut. 5.9% increase, if I recall from a few days ago, is $67.00...... $1,146 plus $67.00 = $1,213.00. What's my monthly SS payment going to be?
Disclaimer: The above is calc'd based on what you just posted, the assumption that you only have the standard Pt B amount deducted and the referenced 2022 Pt B estimate.
@crash, I don't want to pry, but I'm assuming your net is the same as your gross, meaning you are not being taxed on the SS income. That is what stillers is showing. Using your actual gross if different from net may be more accurate for calculating your increase.
Below are the Fed tax rules I found for gross/net differences. Not sure what your state income tax rules are.
What Percentage of Social Security Is Taxable? If you file as an individual, your Social Security is not taxable only if your total income for the year is below $25,000. Half of it is taxable if your income is between $25,000 and $34,000. If your income is higher than that, up to 85% of your benefits may be taxable.
$1,213.00 will be the GROSS in 2022, prior to Medicare taking its cut. Yes, I'm not taxed on SS. But the monthly Medicare premium will take me down to what figure, I'm wondering?
$1,213.00 will be the GROSS in 2022, prior to Medicare taking its cut. Yes, I'm not taxed on SS. But the monthly Medicare premium will take me down to what figure, I'm wondering?
Hmmm...
Did you not see my prior post on this thread that shows your ESTIMATED calc?
Or maybe you did and either don't think it's correct/want a 2nd opinion?
1. The premium is computed based on expected 2022 costs for Medicare (pdf p.26, second paragraph). That's no different from what virtually every other insurer does when setting premiums. This calculation is de novo; it does not look at what the premium was last year.
2. The $158.50 estimate does not (yet?) include the impact of covering Aduhelm (pdf p94, bottom paragraph). So that might affect the final numbers.
3. There's a $3 claw back for some premium reductions (hold harmless reductions and the 2021 cap on the premium increase). Pdf p. 89. This is projected to be added onto premiums through 2025 (pdf. p 90, 2nd full paragraph).
In a desperate attempt to relate this to mutual funds, I'll point out that this claw back is very similar to the claw back that mutual funds employ with temporary fee waivers. See, e.g. TRBUX (gross ER 0.29%, but net ER of 0.31% including a 0.02% claw back).
@bee Agree. One should/may choose over many years to continue to adjust an equity portfolio, as industries and offerings change; to match what one and others "use/want/need". These methods are part of our continued/current exposure to healthcare as with FSMEX and other broad healthcare; as well as technology areas.
Excuse the serious drift of this thread............. Catch
Has the govt. published the newest IRMAA income thresholds? I've tried looking around online, but have only found some"predictions" by "experts" (who give different numbers).
Well, yes. Part B premiums cover about 1/4 of the cost of providing health care to participants. Tax dollars pay for the other 3/4. So the government is increasing the tax dollars it is contributing toward recipients' care from $445.50/mo (3 x $148.50) to $510.30.
Medicare is one of the only places in which the government has actively sought to hold down medical costs. That's true even in the ACA, where despite the hype, most of the cost containment measures were on the Medicare side.
You're right that in some areas Congress doesn't have a backbone. For example, deferred and then eliminated the Cadillac tax.
Comments
I did this relatively quickly - please check my math. Also see Disclaimer below.
Looking ahead...
If your gross SS is $15,000 annually, a 2022 5.9% COLA increases your gross by $885. If SS is $20,000, an increase of $1,180.
No definitive word yet on the Medicare Part B increase for 2022.
Looking back...
In 2020, Part B increased 6.72% to $144.60 monthly from $135.50. Annually that was a $109 increase.
In 2021, Part B increased 2.70% to $148.50 monthly from $144.60. Annually that was a $47 increase.
So...
IF the past two years are any indication, it is very unlikely, barring an extraneously high Pt B increase for 2022, that anyone grossing $15K-$20K annually will not be in a better net position is 2022.
NOTE: Part D premiums are NOT considered here but would also affect net, if applicable, as would other variables, increase in Pt B penalty, etc.
Disclaimer: Data provided by long-since retired auditor type whose calculation accuracy rate may or may not resemble his stellar rate from back in the day. Just sayin'.
https://sgp.fas.org/crs/misc/R40082.pdf
However, for 2021 the law was changed so that the federal government absorbed most of the premium increase. https://www.aarp.org/politics-society/advocacy/info-2020/congress-medicare-part-b.html
So part of the increase for 2022 would seem to be catching up to what 2021 should have been. Thus only the remainder of the 2022 increase would be due to the projected rise in medical costs between 2021 and 2022.
That may not make you feel any better, but it does help to harmonize the 2022 premium increase (whatever that turns out to be) with the small increase in medical costs over the past year.
While CMS announces original Medicare premiums in November, it has already released average increases for private Medicare insurance: https://www.cms.gov/newsroom/press-releases/cms-releases-2022-premiums-and-cost-sharing-information-medicare-advantage-and-prescription-drug
NOTE: relative to Medicare premium only, not any other changes to Medicare for 2022.
An example: 2021 SS monthly benefit = $2,000/month. The 2022 benefit will be $2,118 ($2,000 X 5.9%). The normal monthly Medicare premium will increase in 2022 from $148.50 to $158.50/month. 2022 SS/monthly benefit increase of $118 - $10, 2022 Medicare monthly premium increase = a net monthly SS benefit increase of $108. This is $1,296/annual.
Someone is doing too much Maui-Wowie. You need to contact whomever wrote what you read to have a re-do moment.
Backing into your Bene from what you just posted, and assuming you ONLY have Pt B deducted, here are the rough estimates...
2021 Gross Bene: $1,146.00+148.50=1,294.50
2022 Gross Bene $1,294.50*1.059=$1,370.88
2022 Net Bene: $1,370.88-158.50**=$1,212.38
2022 Increase: $1,212-$1,146.00=$66.00
** = ESTIMATED Pt B Premium deduction per
https://www.medicareresources.org/faqs/how-much-does-medicare-part-b-cost/
See also latest posts on:
https://www.mutualfundobserver.com/discuss/discussion/58777/ss-increase-what-to-do#latest
Disclaimer: The above is calc'd based on what you just posted, the assumption that you only have the standard Pt B amount deducted and the referenced 2022 Pt B estimate.
Below are the Fed tax rules I found for gross/net differences. Not sure what your state income tax rules are.
Not sure about any other poster's use of it.
Did you not see my prior post on this thread that shows your ESTIMATED calc?
Or maybe you did and either don't think it's correct/want a 2nd opinion?
One needs to read the source cited for the estimated 2022 premium to discover the ultimate source. That's the 2021 annual report of the Medicare trustees.
https://www.cms.gov/files/document/2021-medicare-trustees-report.pdf
A few items in that report worth mentioning:
1. The premium is computed based on expected 2022 costs for Medicare (pdf p.26, second paragraph). That's no different from what virtually every other insurer does when setting premiums. This calculation is de novo; it does not look at what the premium was last year.
2. The $158.50 estimate does not (yet?) include the impact of covering Aduhelm (pdf p94, bottom paragraph). So that might affect the final numbers.
3. There's a $3 claw back for some premium reductions (hold harmless reductions and the 2021 cap on the premium increase). Pdf p. 89. This is projected to be added onto premiums through 2025 (pdf. p 90, 2nd full paragraph).
In a desperate attempt to relate this to mutual funds, I'll point out that this claw back is very similar to the claw back that mutual funds employ with temporary fee waivers. See, e.g. TRBUX (gross ER 0.29%, but net ER of 0.31% including a 0.02% claw back).
@msf mentioned (to relate this back to mutual funds) A good "healthcare-centric" fund will help you fund your healthcare costs:
https://morningstar.com/stocks/xnas/biib/ownership
Agree. One should/may choose over many years to continue to adjust an equity portfolio, as industries and offerings change; to match what one and others "use/want/need".
These methods are part of our continued/current exposure to healthcare as with FSMEX and other broad healthcare; as well as technology areas.
Excuse the serious drift of this thread.............
Catch
when-take-social-security-complete-guide
I've tried looking around online, but have only found some"predictions" by "experts" (who give different numbers).
Excerpt:
The standard premium for Part B will be $170.10 next year, far above the earlier estimate of $158.50.
Well, yes. Part B premiums cover about 1/4 of the cost of providing health care to participants. Tax dollars pay for the other 3/4. So the government is increasing the tax dollars it is contributing toward recipients' care from $445.50/mo (3 x $148.50) to $510.30.
Medicare is one of the only places in which the government has actively sought to hold down medical costs. That's true even in the ACA, where despite the hype, most of the cost containment measures were on the Medicare side.
You're right that in some areas Congress doesn't have a backbone. For example, deferred and then eliminated the Cadillac tax.