Medicare beneficiaries will pay less for their Part B premium next year, the first decrease in a decade. Other Medicare costs, like Part A deductibles, are on the rise. Here’s Continue Reading
Medicare beneficiaries will pay less for their Part B premium next year, the first decrease in a decade.
Other Medicare costs, like Part A deductibles, are on the rise.
Here’s how it breaks down.
Medicare Part B Premiums Will Decrease in 2023
The standard Medicare Part B premium will be $164.90 a month in 2023, down from $170.10 in 2022.
That’s $5.20 less per month, or a 3% decrease.
It’s been a decade since Part B premiums decreased instead of increased.
The Part B deductible — the cost enrollees pay out-of-pocket each year before Medicare starts paying its share — is also decreasing next year, from $233 in 2022 to $226 in 2023.
Medicare Part B is a foundational part of the federal insurance program, covering doctor visits, outpatient surgeries, medical equipment and more. It charges beneficiaries a monthly premium for coverage and is usually deducted from Social Security checks.
Decreasing premiums is good news — but it comes on the heels of the biggest Part B premium increase in Medicare history. From 2021 to 2022, Part B premiums jumped $21.60 — or 14.5%.
Why Are Medicare Part B Premiums Going Down in 2023?
In 2021, a pricey new Alzhimher’s medication called Aduhelm hit the market. The controversial infusion treatment came with a sticker price of nearly $56,000 a year.
Medicare wasn’t sure if it would cover the new drug. Or how Medicare would pay for it.
To create a revenue safety cushion, the Centers for Medicare & Medicaid Services (CMS) hiked everyone’s Part B premiums in 2022 to cover projected spending on the drug — just in case.
Ultimately, CMS decided to only cover Aduhelm in very limited situations. Medicare didn’t need all that extra money from Part B premiums, after all.
In May 2022, CMS recommended that any extra revenue should go toward lowering Part B premiums for Medicare beneficiaries.
Still, the modest reduction beneficiaries will see next year (down $5.20) is just a fraction of the increase they shouldered this year (up $21.60 from 2021).
Other Medicare Costs Changing in 2023
While costs for Medicare Part B are going down, costs for Medicare Part A are going up.
Part A primarily covers hospital stays and skilled nursing facilities.
Most enrollees don’t pay a monthly premium for Part A, but a deductible is charged for each hospital stay.
The Part A deductible is increasing by $44, from $1,556 in 2022 to $1,600 in 2023.
Coinsurance amounts for inpatient care are also rising.
Patients who are hospitalized for between 61 and 90 days will now pay a daily coinsurance amount of $389, up from $400. After 90 days of hospitalization, they will owe a coinsurance amount of $800, up from $778.
2023 Medicare Costs at a Glance
|Program||2023 Cost||2022 Cost||Change|
|Medicare Part B premium||$164.90 per month||$170.10 per month||-$5.20|
|Medicare Part B deductible||$226 per year||$233 per year||-$7|
|Medicare Part A deductible||$1,600 per year||$1,556 per year||+$44|
Meanwhile, the projected average premiums for both Medicare Advantage plans and Part D plans are expected to decrease slightly in 2023.
Medicare Surcharge Will Also Be Lower for High-Income Earners
Higher-income Medicare beneficiaries will pay less in extra Medicare premium charges in 2023 than they did this year.
Simply put, Part B and Part D premiums are tied to a beneficiary’s income. People with higher incomes pay more than the standard Medicare premiums through what’s known as income-related monthly adjustment amounts, or IRMAAs.
Only about 7% of Medicare enrollees pay IRMAAs, according to CMS.
In 2023, the income threshold for IRMAAs is rising and the monthly surcharge is going down.
These additional charges kick in for beneficiaries earning $97,000 for single tax filers (up from $91,000) and $194,000 for joint filers (up from $182,000).
Once you cross that threshold, an additional $65 is added to your Part B premium, a decrease of $3 from 2022.
Meanwhile, the wealthiest older Americans — singles with $500,000 of income or more and couples with $750,000 of income or more — will pay an additional $395.60 per person, a $12.60 decrease over 2022.
Medicare Open Enrollment Begins Oct. 15
Each year, beneficiaries get a chance to compare plans and adjust their coverage during Medicare open enrollment. It runs from Oct. 15 to Dec. 7.
CMS releases next year’s Medicare cost information ahead of open enrollment so you can make informed decisions about your coverage options.
During open enrollment, you can:
- Switch from Original Medicare to Medicare Advantage or vice versa.
- Switch to a different Medicare Advantage plan.
- Sign up for Part D if you didn’t enroll when you first became eligible.
- Change to a different Part D plan.
Whatever changes you make during open enrollment go into effect Jan. 1, 2023.
If you’re happy with your Medicare coverage, you don’t need to do anything.
But if your Medicare Advantage or Part D plan is changing next year — or you feel like you’re paying too much for your coverage — shopping around is a smart decision.
You can compare your coverage options using the online Medicare Plan Finder tool.
Have questions about signing up for a plan? The State Health Insurance Assistance Program, or SHIP, is a national network of trained volunteers who provide one-on-one assistance, counseling and education to Medicare beneficiaries and their families.
Medicare is the nation’s largest federal health care program. In 2021, it covered roughly 64 million people ages 65 and older along with some younger people with long-term disabilities — 19.3% of the U.S. population based on census data.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.