There was some good news to share about the Social Security cost of living adjustment for 2022, but out-of-pocket Medicare costs are another matter. The program has release the parameters for the new year, and we will take a look at them here.
Medicare Part A
The portion of the program that covers hospitalization is Medicare Part A. There is no premium unless you have not earned eligibility and you want to pay for this coverage. However, beneficiaries are required to pay a deductible per benefit period, and it will be $1556 in 2022.
There is coinsurance for particularly long periods of hospitalization. The first 60 days are completely covered, but there is coinsurance for days 61 through 90. In 2022, it will be $389 a day which is an $18 a day increase. The daily coinsurance is going to be $778 for stays that exceed 90 days.
You would use lifetime reserve days if you are in the hospital for more than 90 days, and you are allotted 60 of these during your lifetime.
Medicare Part B
Part B covers treatments that are administered by doctors and other types of approved health care professionals. There is a monthly premium, and it is deducted from your Social Security payout if you are drawing a benefit.
This year, the premium for people that claim $88,000 or less on their taxes is $148.50 a month. The cutoff will be $91,000 in 2022, and the premium is going up to $170.10. Premiums get progressively higher for filers that claim more than $91,000.
Medicare Advantage Plans fall under Part C, and you can bundle all the different types of coverage if you obtain this type of coverage. There are almost 4000 different Medicare Advantage Plans to choose from, and the out-of-pocket costs vary.
Medicare Part D
The final piece is the prescription drug coverage. Once again, you can choose from different plans that are offered by private insurers so the costs will depend on the choices that you make.
Nursing Home Care
Most elders will need help with their activities of daily living, and just over a third will spend time in nursing homes. A lot of people assume that Medicare will cover these costs because it is intended to address the health care needs of senior citizens.
In fact, Medicare coverage does not extend to the custodial care that nursing homes provide. You are looking at a median annual cost of $103,295 for a private room in Charlotte in 2022, and the figure is over $85,000 in the Ashland, Kentucky area.
As you can see, these costs can consume a considerable portion of your legacy if you have to pay them yourself. Fortunately, Medicaid will cover long-term care costs, and it is possible to gain eligibility if you take the right steps at the right times.
The Medicaid asset limit is just $2000, and there is a five-year look back period so you will generally be penalized if you give away assets less than five years before applying for Medicaid.
You do have options for Medicaid planning to preserve assets, though. One of the options is to fund an irrevocable Medicaid trust at least five years before you think that you may require living assistance. Other options may be available if you do not have five years to wait. The key is to discuss your options with an elder law attorney as early as possible.
Schedule a Nursing Home Asset Protection Consultation!
We can help you position your assets wisely with future Medicaid eligibility in mind. If you are ready to get started, you can call us at 704-944-3245 to schedule a consultation at our Huntersville, NC or Charlotte, NC elder care planning office.
Our Ashland, Kentucky location can be reached at 606-324-5516, and our Florence, Kentucky location can be reached at 859-372-6655. You can also use our contact form if you would like to send us a message.