Healthcare

Medicare Part D Premiums Are Set to Rise for 2022

by Alli Thomas

Aug 20, 2021

Recently, the Centers for Medicare and Medicaid Services (CMS) released its 2022 projected average basic monthly premium for Part D.

According to the agency, that amount will be $33. That comes out to an increase of nearly 5% from 2021’s average basic monthly premium of $31.47.

The CMS releases the monthly premium projection each year to help Medicare beneficiaries make decisions on which plan is best for them. The final amount of 2022’s average basic monthly premium will be published in mid- to late September.

 

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Not Familiar with Medicare Part D? Here are Some Key Facts

Here’s an easy way to remember: D stands for drugs. Medicare Part D is the prescription-drug component of the Medicare program.

It’s optional, but if you don’t sign up for it as soon as you’re eligible for Medicare, you could face a late enrollment penalty when you do enroll. For every month that you don’t have Part D coverage, you’ll pay a 1% penalty, which will continue for the rest of your life.

Additionally, if you don’t enroll in Part D upon reaching eligibility, you’ll have to wait to do so until the next annual open enrollment window (starting in mid-October and ending in early December) to sign up. That coverage won’t kick in until January 1 of the following calendar year, so should you need medication in the middle of the year, you’ll have to pay out of pocket.

Beyond the monthly premium, Part D plans also include an annual deductible and copayments.

Other things to consider when choosing a Part D plan is the type of drugs you need and which pharmacies are in the plan’s network. You can also review plan ratings from users and healthcare providers to help you decide.

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Alli Thomas

Alli Thomas has worked in the financial services industry for nearly 20 years, with a focus on retirement-related investing. She began her career as a FINRA-licensed participant-services call-center associate at Vanguard, and then moved to Principal Financial Group, where she worked closely with employers, assisting with retirement plan set-up and design, selecting appropriate plan investment offerings, and maximizing employee participation through targeted education campaigns and enrollment meetings. Alli has also worked as a qualified 401(k) administrator and registered investment advisor for several small investment firms. She now writes about all things investment- and finance-related, leveraging her extensive experience and passion for retirement planning to help investors make well-informed financial decisions.

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