Medicare Open Enrollment 2022: Guide To Buy

The annual open enrollment period for Medicare coverage has just started! Here is everything you need to know about this year’s coverage costs, enrollment dates, eligibility requirements, and options for changing coverage.

When is the Medicare Open Enrollment Period?

Medicare open enrollment, also defined as Medicare’s annual election period, takes place each year from October 15 to December 7.

(Although Medicare open enrollment ends on December 7 every year, extended registration opportunities are provided to applicants in states where FEMA declares an urgent situation or catastrophic event that prevents you from signing up during the standard window.)

During the open enrollment, Medicare program enrollees can reconsider their coverage – whether it is Original Medicare with supplemental prescription coverage or Medicare Advantage plan – and make adjustments or purchase new policies if they prefer to do so.

Before 2021, patients with ESRD could not enroll in the Medicare Advantage program unless a Medicare Special Needs Plan was available in their region for ESRD sufferers. But that changed from 2021, under the 21st Century Cures Act. People with ESRD were given the option to sign up for Medicare Advantage, and CMS expects that more than 40,000 people will participate by 2021. This can be particularly beneficial for recipients with ESRD under the age of 65 and who live in states where access to Medigap plans for applicants under 65 is not guaranteed.

What You can’t do when Signing up for Medicare

The annual open enrollment period for Medicare coverage does not apply to Medigap plans which in most states are only guaranteed issue during beneficiary’s initial enrollment and limited special enrollment periods. 

If you didn’t register in the Medicare plan when you first became eligible, you would be unable to sign up during the fall enrollment period. Instead, you can purchase Medicare during the general enrollment period— from January 1 to March 31.

The general enrollment period is for applicants who did not enroll in Medicare Part B coverage when they first became eligible. And they do not have access to a Medicare (Part B) Special Enrollment Period. It also applies to people who need to pay a Part A premium and not sign up for Part A when they were first qualified to apply. 

If you enroll in a health plan during the Medicare open enrollment, your coverage will begin on July 1. 

How to Enroll in and Change Medicare Plans

Once you’ve signed up for Medicare, you’ll have several options for changing certain aspects of your health coverage. Here’s an outline:

During the annual open enrollment window ( from October 15 to December 7), you can make several changes, none of which require medical underwriting:

• Change your Medicare Advantage plan to Original Medicare or vice versa.
• Switch from one Medicare Advantage plan to a different one.
• Change from one Medicare Part D prescription plan to another. It is strongly advised that all recipients use Medicare’s program finder tool each year to compare available Part D plans, rather than simply allowing an existing drug plan to auto-renew.
• Sign up for a Medicare Part D plan. (You might be charged a late-enrollment fee.)
• You can cancel your Part D coverage entirely. (If you re-enroll in a later year, you’ll encounter a late-enrollment penalty if you don’t have other creditable drug coverage.)

During the Medicare Advantage open enrollment period (lasts from January 1 to March 31), US citizens who already registered in Medicare Advantage plan can: 

• Change to Original Medicare plan (and register in a Part D coverage; access to Medigap program might require medical underwriting) 
• Change to a new Medicare Advantage plan.
• Only one plan alteration is allowed (unlike the fall enrollment, where an applicant can change their mind several times, with the final plan choice taking effect on January 1).

During the five-star registration period (December 8 to November 30), persons who reside in a state with a five-star Medicare Advantage plan or Medicare Part D can switch to that program.

During the first year of Medicare Advantage enrollment, a person can change to (or return to) an Original Medicare plan and a Part D coverage. They also have full access to a Medigap plan, with some exceptions.

A person registered in Original Medicare can apply for a new Medigap plan at any time of the year.

• But suppose it’s not during the applicant’s one-time Medigap enrollment period. In that case, the provider will likely use the medical subscription to determine whether or not to issue the plan and at what cost (note that some states have annual or continuous windows when at least some Medigap coverages are guaranteed as issued).

Medicare Eligibility Criteria

Medicare eligibility for most Americans coincides with the age of 65, but some applicants become eligible for Medicare earlier. Most Medicare beneficiaries do not need to pay a monthly premium for Medicare Part A, but some do. Furthermore, some recipients must pay more than the average Medicare (Part B & Part D) coverage costs.

Here’s a comprehensive overview of who qualifies for all parts of Medicare coverage. To summarise:

• When most Americans reach the age of 65, they become eligible for Medicare. Nevertheless, 14% of all Medicare beneficiaries are below 65 and became eligible after receiving two years of Social Security disability benefits or being diagnosed with end-stage renal disease or ALS (Amyotrophic lateral sclerosis).
• To enlist in the Medicare Advantage Plan, you must first sign up for Medicare Parts A and B coverages. Both parts will be replaced by your Medicare Advantage plan, including Medicare Part D prescription drug coverage.
• To qualify for Medicare Part A without paying a monthly insurance premium, you or your partner must have worked in the United States for at least ten years while paying Medicare taxes.
• If your wages are high, you will pay more for Part B and Part D coverage than others. High income is defined in 2021 as having a 2019 income of more than $88,000 for a young person or $176,000 for a couple. This is expected to grow to $ 91,000 and $ 182,000 in 2022; the determination is still based on income earned two years earlier, so the calculation for 2022 will depend on the earnings made in 2020.
• You can enroll in Medicare Part D coverage if you have either Medicare Part A or Part B.
• If you have Medicare Parts A and B (but not Medicaid or Medicare Advantage), you can register for a Medigap plan to supplement your Medicare coverage. You’ll get a five-month guaranteed-issue window in which you can register in any Medigap coverage available in your community. In most regions and situations, you should review medical premiums if you want to proceed with Medigap coverage after that window closes.

How to Enlist in Medicare Plans during Open Enrollment

This section leads you to the fundamentals of enrolling in Medicare. 

But first, read our suggestion on deciding between an Original Medicare plan plus Medigap and Part D coverage and a Medicare Advantage plan.

i) Signing up for Original Medicare

Suppose you already receive Railroad Retirement Board or Social Security benefits and live in the United States. In that case, the federal government automatically registers you in both Medicare Part A and Part B coverage at the age of 65. Your Medicare insurance card will arrive in the mail about three months before you turn 65, and your coverage will begin on the first of the month you turn 65.

The monthly premium for Medicare Part B is deducted from your Railroad Retirement or Social Security check. In 2021, the standard Part B premium is $148.50/month and is projected to increase in 2022. The Medicare Trustees Report expects a Part B premium of $158.50 per month for 2022 (the cost-of-living adjustment for 2022 is expected to be substantial, allowing the total premium increase to be implemented for most enrollees; learn more about how that works). 

You can waive Part B and avoid the premiums, but it’s typically a good idea to do so only if you have health insurance from your current company or your spouse’s current employer and the organization has at least 20 workers.

If you reach the age of 65 but do not yet receive Railroad Retirement or Social Security benefits, you will not be automatically registered in Original Medicare. Instead, you’ll be able to sign up during a seven-month registration period that includes the three months preceding your birth month, the month you turn 65, and the three months following. So, if you turn 65 on July 14, your open enrollment period will run from April to October.

You’ll apply for benefits through the Social Security Administration. Although your enrollment period is seven months long, you must enroll three months before your birthday month to get coverage that will begin on the first of the month you turn 65. If you apply during your birthday month or one of the following three months, your Part B coverage will begin later.

If you are disabled and receive Social Security impairment benefits, your Medicare plan will automatically start in the 25th month in which you receive disability benefits. (If you have end-stage kidney disease or ALS, you don’t need to wait two years to purchase Medicare.)

ii) Signing up for Medicare Advantage Coverage

To join a MA (Medicare Advantage) plan, you must have Original Medicare (Parts A & B) coverage and live in a region where an Advantage program is available. (While Medicare Advantage plans are obtainable in most parts of the country, some provincial areas do not.)

The Medicare Advantage program combines Medicare Part A and B (and, in most situations, Part D) coverage into a single plan. Nevertheless, you’re still required to pay the government a Part B premium in addition to the Medicare Advantage payments (which possibly $0 depending on the plan).

You can purchase a Medicare Advantage plan when you first become eligible for a Medicare plan or during the fall Medicare open enrollment period (October 15 to December 7).

iii) Signing up for Medicare Part D Plan

The first opportunity to sign up for Medicare Part D is when you are initially qualified for it—during the seven months starting three months before you reach the age 65 or during the seven months commencing three months before your 26th month of disability. (The eligibility rules differ if a person enrolls in Medicare coverage due to ALS diagnosis or end-stage renal disease.)

In both circumstances—whether you are turning 65 or eligible for Medicare due to a disability—you may be able to choose a Medicare Advantage plan that includes Part D prescription drug coverage and use it in place of Medicare A, B, and D.

Suppose you sign up for Medicare during the January – March General Enrollment Period. In that case, you can join a Medicare Advantage plan (the majority of which include Part D) between April 1 and June 30. If you already have premium-free Part A coverage and are just registering for Part B during the open enrollment, you must wait until the fall open enrollment window (October 15 -December 7) to apply for stand-alone Part D coverage. The Part D plan can be purchased with either Part A or Part B, whereas Medicare Advantage requires both. So, if you already had premium-free Part A coverage, you were eligible for Part D as of the date your Part A insurance began.

Suppose you’re enlisted in a Medicare Advantage coverage and switch to Original Medicare during the MA open enrollment period (January 1- March 31). In that case, you might have the option to register for Part D coverage to supplement your Original Medicare plan.

iv) Signing up for Medicare Supplement Insurance (Medigap)

During your initial Medigap open enrollment period (the six months beginning with the month you turn 65 and registered in Medicare A and B), you cannot be denied a Medigap plan or charged more for it because of your medical history. 

Nevertheless, once that period ends, Medigap insurance providers in most states can use medical underwriting to determine your premium costs and eligibility for coverage. (New York, Missouri, Maine, Massachusetts, Connecticut, California, Washington, and Oregon, have laws that make it easier for people to sign up or switch to a new Medigap coverage after the initial open enrollment period has ended. 

Thirty-three states offer a guaranteed issue window during which you can buy a Medigap plan if you are below the age of 65 and qualify for Medicare due to a disability. However, in most of those states, carriers can charge higher rates for people under 65. You can see how Medigap plans are regulated in each state by checking out medicareleads.com.

To learn more about Medigap policies in your area, contact your state’s insurance department or the state’s health insurance assistance program, or call 844-844-3049 to speak with one of our agents who can help you find a health plan in your region. 

Medicare Costs in 2022

Each part of the Medicare plan has costs associated with it, whether in premiums, out-of-pocket costs when medical care is required, or both. Below is the summary of what to expect. Official figures for most 2022 prices will not be accessible until October/November 2021; we’ve reviewed the items where 2022 data is already available, and we’re using the 2021 Medicare Trustees Report for 2022 projections. This page will be updated as new information become available:

Medicare Part A coverage (inpatient services)

2022 Part A Premium Costs

• There is no premium for the majority of beneficiaries who paid into Medicare through payroll taxes.
• ESTIMATED: $274/month – for those who worked/paid into the Medicare plan for 7.5 to ten years (slightly higher than $259/month in 2021).
• ESTIMATED: $499/month – for those with less than 7.5 years of work experience (up from $471/month in 2021).

2022 Part A Deductible

• ESTIMATED: $1,556 (an increase from $1,484 in 2021)
• Up to 60 days in the hospital are covered.
• The deductible is calculated per benefit period, not annually. If a beneficiary were out of the medical center for at least 60 days, a new benefit period would begin if and when they need hospitalization again.
• Supplemental coverage, such as Medigap programs, will pay some or all of your Part A deductible.

2022 Part A Coinsurance

• ESTIMATED: $388 per inpatient day (days 61-90 of the benefit period the deductible applied; an increase from $371 per day in 2021).
• ESTIMATED: $778 per inpatient day from day 91 onwards during the coverage benefit period (up from $742/day in 2021). These are your lifetime reserve days, and you only have 60 of them in your entire life. They are only reduced after you have spent 90 days in the hospital in a single benefit period. And, if you use all of your lifetime reserve days and do not have supplemental coverage, you will be responsible for all hospital costs after the lifetime reserve days have been depleted.
• Medicare Part A plan covers 100% of the cost of healthcare in a specialized nursing facility for the first 20 days, provided you spent at least three nights in the hospital before being admitted to SNF or skilled nursing facility. After the first 20 days, your 2021 medical care facility’s coinsurance is $ 185.50 per day for days 21 to 100 (after which the Medicare plan no longer covers the charges of skilled nursing facilities, so you will be required to pay the total cost). In 2022, the skilled nursing facility coinsurance for days 21-100 is expected to increase to $194.50 per month.
• Supplemental coverage, such as Medigap plans, is intended to pay your Part A coinsurance. In addition, after Medicare benefits are exhausted, all standardized Medigap plans will pay for up to 365 additional days in the hospital. Most Medigap policies also cover at least some of the coinsurance costs for skilled nursing facilities.

Medicare Part B (outpatient care services)

2022 Part B Premium Costs

• The standard Part B insurance premium for 2021 is around $148.50 per month. Although it has not been finalized for 2022 coverage, the Medicare Trustees Report predicts a monthly Part B premium of $158.50 in 2022. The short-term federal government spending bill that was signed into law on October 1, 2020, restricted the increase in Part B premiums for 2021. The Part B premium for most applicants was $144.60 per month in 2020, and the budget proposal capped the extension for 2021 to a quarter of what it would have been otherwise. Earlier in 2020, the Medicare Trustees Report predicted that most enrollees would pay $153.30 per month for Part B in 2021. The actual price that people pay might be limited by the Social Security cost of living adjustment (COLA) that beneficiaries receive, but the 1.3% COLA for 2021 was sufficient to allow the total Part B premium to be deducted from most beneficiaries’ Social Security checks.
• High-income applicants pay a higher Part B premium. As of 2021, the high-income threshold starts at $88,000 for a single person and $176,000 for a couple (based on 2019 income). The Part B premium rates for high-income recipients range from $207.90 to $504.90 per month. The high-income threshold is expected to expand to $91,000 for an adult and $182,000 for a couple by 2022 (calculation based on 2020 income).
• Part B premiums are also relatively high (due to a penalty) for some recipients who delayed their registrations.

2022 Part B Deductible

• ESTIMATED: $217 in 2022. Applicants who receive Part B-covered services during the year need to pay the Part B deductible before Medicare includes 80% of the cost of the medical care. Moreover, the Part B deductible will be $203 in 2021, up from $198 in 2020.
• Part B deductibles are covered by Medigap plans C and F, but they are no longer available to newly eligible Medicare enrollees. (Plan G is still available for re-qualified enrollees; it is identical to Plan F except that enrollees pay their own Part B deductible.)

2022 Part B Coinsurance

• After you’ve paid your Medicare Part B deductible, you will be liable for 20% of the Medicare-approved amount for Part B health services you receive, with no cap on how high your coinsurance payments can get. However, some or all of the Part B coinsurance is covered by Medigap plans.
• If your doctor refuses to accept assignment, they will charge you approximately 15% more unless your region has a lower limit. (Plans F and G of Medigap cover this excess charge; Plan G is still open to newly eligible enrollees, but Plan F is no longer available.)

Medigap Plan

Medigap Coverage Premiums

• In 2018, the average Medigap Plan F cost $143 per month, though prices vary by location. Plan F was the most comprehensive (and widely known) plan at that time, but it is no longer accessible to newly eligible Medicare recipients.
• Plan G coverage is less expensive than Plan F (because it does not support the Part B deductible). It is now the most comprehensive health plan available to newly qualified enrollees, with more than a 1/4 of all Medigap participants in Plan G as of 2019.
• Eight other Medigap plan options are available, with premiums that vary from one provider to another, though not all plan designs are possible in all areas.

Out-of-Pocket Costs for Medigap Insurance

• The out-of-pocket expenses you will incur after your Medigap plan has paid its share will be determined by the plan design you pick.

Medicare Part C (Medicare Advantage Plan)

2022 Medicare Advantage Premiums

• The Part B premiums (estimated to be $158.50 per month for the majority of enrollees) + Medicare Advantage premium
• In 2021, the average rate for a Medicare Advantage plan with combined Part D coverage will be around $21/month, even if two-thirds of participants pay no additional charges other than the cost of Medicare Part B. As a result, the average prices are heavily weighted because most Medicare Advantage enrollees are in zero-premium plans (i.e., they only pay the Part B premium), which significantly drops the average premium. 

2021 Medicare Advantage (MA) Maximum Out-of-Pocket   

• It is around $7,550 by 2021 (does not cover prescription drug costs). This could be changed for 2022, but CMS delayed that decision in a rule issued in early 2021. The upper limit is $7,550— the average Medicare Advantage plan has an out-of-pocket limit that is less than the government’s maximum.
• Find out more about Medicare Advantage.

Medicare Part D with Prescription Drug Coverage

2021 Part D Premium Costs

• In 2021, the average monthly expense for Medicare Part D coverage is about $38. There is still a wide range of Part D coverage options available. Part D premiums start as low as $7/month in 2021, down from a minimum of up to $13/month in 2020. Plans on the higher end can have premiums of about $100/month or more, indicating a great deal of variation—in cost and benefits—across the available plans.
• High-income applicants will pay the maximum Part D premium. As of 2020, the high-income limit began to be indexed. The standard deduction for 2021 is $88,000 for an individual and $176,000 for a couple. It is expected to surge to $91,000 and $182,000 by 2022 (the high-income determination is always based on earnings made two years before the plan year in question).

Part D Deductible

• In 2022, the maximum will be $480, up from $445 in 2021. (In some cases, there is no deductible at all.)

Out-of-Pocket Costs for Part D after the Deductible

• Not to outpace 25% of the total cost of generic versions and brand-name drugs. There is no longer a donut hole in the maximum amount that enrollees can be charged when filling prescriptions. However, the donut hole remains in terms of how providers design their plans (for example, with different coinsurance or copay amounts before the actual donut hole threshold), how total drug costs are calculated, and who pays the majority of the drug costs.
• After a beneficiary’s expenses reach the catastrophic insurance threshold (which will be $7,050 in 2022, higher from $6,550 in 2021), new out-of-pocket expenses are capped at a maximum of 5% of the cost of the medications or a $3.95 copay for generic and $9.85 for branded drugs. (Both of these figures represent a slight increase from 2021.)

Medicare IRMAA (Income-related Monthly Adjustment Amount)

The income of a Medicare beneficiary can also affect the premiums they pay for Medicare Part B and Part D. IRMAA is a service charge added to Medicare Part D and Part B premiums if a beneficiary’s income exceeds $88,000 ($174,000 for a married couple).

These income restrictions will take effect in 2021 (but depends on tax returns filed in 2019) and will be indexed for inflation. They are expected to be slightly higher in 2022, at $91,000 and $182,000, respectively (based on the income earned in 2020).