Hot off the press: Social Security and Medicare updates for 2022

December 13, 2021

Each year, millions of baby boomers reach retirement age. These baby boomers often look to their employers for guidance and information on transitioning to the next phase of life. To do this, employers have to stay up-to-date on the latest Social Security and Medicare trends and changes. And, if you’re an employee, it’s important to have the right information to help you make the best decisions for your long-term financial security, healthcare coverage, and other retirement-related considerations.

Knowing what Social Security and Medicare provide in retirement and when to start benefits is key. Let’s start by examining some high-level changes related to cost-of-living, taxable earnings, full retirement age, and Medicare premiums and deductibles.

Trend spotlight: increases all over!

Cost-of-Living adjustments

On October 13, 2021, the Social Security Administration (SSA) announced all of their 2022 figures. As it turns out, Social Security beneficiaries will receive a huge 5.9% cost-of-living adjustment (COLA) for monthly benefits payable in 2022 – the largest increase in 40 years! The COLA is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). For the average retired worker, the increase is about $92 a month for a monthly benefit of $1,657.

Taxable earnings base increase

The Social Security taxable earnings base will increase to $147,000 in 2022 from $142,800 in 2021. There are about 175 million working people paying this combined 7.65% payroll tax, matched by their employers, to support these programs.

Full retirement age limit

In 2022, the full retirement age (FRA, or the age at which a person may first become entitled to full or unreduced retirement benefits) will be 66 and 4 months for people born January 2, 1956, through January 1, 1957. However, keep in mind that, for Social Security and Medicare purposes, the FRA is established on the day before an individual’s birthday. So, for example, someone born on January 1 is considered to have been born in the previous year.

For more examples, reference the Social Security figures in the table below related to when different individuals reach FRA.

Medicare premiums and deductibles

On November 12, 2021, the Centers for Medicare and Medicaid Services (CMS), an agency under the U.S. Department of Health and Human Services (HHS), released the 2022 Medicare premiums and deductibles. Here are some highlights related to increases:

  • The standard Part B monthly premium will increase to $170.10 in 2022 for most current, new, and high-income Medicare beneficiaries, as well as for people whose Medicare premiums are paid by Medicaid.
  • Beneficiaries with high incomes will pay additional income-related Part B premiums in the upcoming year.
  • For Medicare Part D recipients, the standard prescription drug plan for 2022 is predicted to be $33 per month ($2.50 more than 2021). Drug plan enrollment is within three months of becoming eligible for Medicare and premiums are adjusted every January. Individuals can change plans or enroll for the first time from October 15 to December 7, and coverage becomes effective on January 1. Also, note that high-income enrollees in Part D pay a premium surcharge that operates very much like the Part B program.

Summary Table: 2021 vs. 2022 Social Security and Medicare data

The following table provides even more in-depth comparisons between 2021 and 2022 Social Security and Medicare figures, including both increases and decreases.

Social Security 2021 2022
Cost-of-living Adjustment (COLA) for December (payable in January). 1.3% (12/20) 5.9% (12/21)
FICA tax rate:    
  • Social Security for employees.
6.20% 6.20%
  • Medicare (Hospital Insurance). An additional FICA tax of 0.9% applies to high-income beneficiaries with annual incomes above $200,000 ($250,000 for married couples filing jointly). The employer does not pay this additional percentage.
1.45% 1.45%
Maximum Social Security earnings for tax contributions and benefits. $142,800 $147,000
Medicare taxable earnings. no limit no limit
Earnings required to earn one credit (maximum of four credits per year). $1,470 $1,510
Retirement Earnings Test exempt amounts:    
  • Under full retirement age (FRA) throughout year.
$18,960 $19,560
  • Reaches FRA in year (period before the month FRA is attained).
$50,520 $51,960
  • FRA and over.
no limit no limit
Maximum monthly retirement benefit at FRA. $3,148 $3,313
Medicare Part A (Hospital Insurance) 2021 2022
Part A inpatient deductible per benefit period. $1,484 $1,556
Part A daily coinsurance 61st through 90th days. $371 $389
Part A daily coinsurance for up to 60 “lifetime reserve” days. $742 $778
Part A daily coinsurance 21st through 100th days in a skilled nursing facility. $185.50 $194.50
Part A voluntary monthly premium if not eligible for premium-free Part A. $471 $499
Part A reduced monthly premium for persons with 30 to 39 credits. $259 $274
Medicare Part B (Medical Insurance) 2021 2022
Part B annual deductible. $203 $233
Part B (Medical Insurance) standard monthly premium for most current, new, and high-income Medicare beneficiaries, and people whose Medicare premium is paid by Medicaid. $148.50 $170.10
Part B (Medical Insurance) standard monthly premium:*    
File an Individual Tax ReturnFile a Joint Tax Return    
0 to $91,000 annual income  0 to $182,000 annual income $148.50 $170.10
$91,001 to $114,000      $182,001 to $228,000 $207.90 $238.10
$114,001 to $142,000       $228,001 to $284,000 $287.00 $340.20
$142,001 to $170,000     $284,001 to $340,000 $386.10 $442.30
$170,001 to $500,000    $340,001 to $750,000 $475.20 $544.30
over $500,000**  over $750,000** $504.90 $578.30
*Income brackets for beneficiaries based on their 2020 federal income tax return filing status and adjusted gross income in 2022 (2019 returns for 2021).    
Medicare Part D (Prescription Drug Coverage) 2021 2022
Part D (Prescription Drug Coverage) monthly premium (estimate). $30.50 $33
Part D monthly premium adjustment for high-income beneficiaries (paid to Medicare):*    
File an Individual Tax Return File a Joint Tax Return    
0 to $91,000 annual income  0 to $182,000 annual income $0 $0
$92,001 to $114,000      $176,001 to $222,000 + $12.30 + $12.40
$114,001 to $142,000       $228,001 to $284,000 + $31.80 + $32.10
$142,001 to $170,000     $284,001 to $340,000 + $51.20 + $51.70
$170,001 to $500,000    $340,001 to $750,000 + $70.70 + $71.30
over $500,000**  over $750,000** $77.10 + $77.90
*Income brackets for beneficiaries based on their 2020 federal income tax return filing status and adjusted gross income in 2022 (2019 returns for 2021).    
2022 Figures Released January 15, 2021 2021 2022
Part D deductible. $445 $480
Part D initial benefit limit. $4,130 $4,430
Part D catastrophic threshold. $6,550 $7,050 
Part D minimum cost-sharing for catastrophic coverage. Generic/Preferred: $3.70 $3.95
Other: $9.20 $9.85

Looking for more? Discover Mercer’s Social Security and Medicare products.

The Social Security and Medicare information above only covers a small percentage of the information in Mercer’s retirement-related products. Now in its 50th edition, the Mercer Guide to Social Security is one of the most popular and trusted Social Security and Medicare products on the market. This booklet gives an easy-to-understand explanation of retirement, survivor, and disability benefits, including over 25 real-life examples and solutions.

Meanwhile, Mercer’s Medicare Booklet explains exactly what you need to know about Medicare in simple, practical terms. For more information or to order either booklet, please visit

This data is designed to help you or your employees properly prepare for a well-deserved retirement. After all, there’s nothing better than peace of mind when it comes to your employees’ financial security and healthcare coverage.