Each year the Centers for Medicare and Medicaid Services review the spending from the federal Medicare Program to project cost changes for the following year. While this is necessary, many Medicare beneficiaries become nervous waiting for the new numbers and expect increases. Fortunately, in 2023, these costs will be lowered from the previous year. We’ll discuss what you can expect from these Part B decreases.
Medicare Part B Premium Updates for 2023
Many beneficiaries look to have the most significant increase in their Social Security benefits due to the cost-of-living adjustment in quite some time. Some are concerned that their Medicare costs will also increase along with this increase. The Medicare Part B premium is actually taking a decrease for next year. This is partly due to the enormous increase in Medicare premiums for 2022.
Why is the Medicare Part B Premium Being Lowered Next Year?
2020’s increase was one of the most significant Medicare Part B premium increases in the history of Medicare. This increase caused many financial problems for Medicare beneficiaries nationwide as several had to make severe lifestyle changes to offset this increase.
There is a new drug Aduhelm used to treat Alzheimer’s disease. The costs of this costly new drug were factored in. Although once the new Medicare determination had been set, the cost of this prescription was slashed in half. The Medicare Part B premium is changing to $174.70.
We initially hoped Medicare would reduce the premium increase from 2022 in the same year. This would provide much-needed instant relief for beneficiaries once this drug’s price was lowered. Unfortunately, this didn’t occur. It was decided that the overpayments would be factored into the pricing for 2023.
Inflations’ Impact on Next Years Medicare Premiums
Inflation has run wild this year and doesn’t seem to show any signs of slowing down. As the pricing of everyday items continues to soar, beneficiaries’ budgets are tightening significantly. Thankfully, as mentioned above, the standard monthly premium for Medicare Part B is decreasing. Those beneficiaries paying for Part A should expect an increase in their Part A monthly premium amount.
Most Medicare enrollees will receive Medicare Part A hospital insurance without a premium. This is based on the number of quarters they worked and paid into Medicare taxes.
We have discussed the premium changes, and Medicare will change several other Medicare costs for 2023. Below we’ll discuss additional changes regarding the different parts of Medicare.
Medicare Part A
As mentioned above, Medicare Part A premiums are increasing. Enrollees that paid Medicare taxes less than 30 quarters can expect to pay a monthly premium of $505. Individuals that paid Medicare taxes between 30 and 39 quarters can expect their premium to increase to $278.
In addition to the premiums, all other cost-sharing associated with Part A have increased. The Part A deductible was changed to $1,632. After you reach the deductible, there are no costs for the first 60 days inpatient at a hospital. For days 61 through 90, you can expect to pay a copay of [GCBB#part-a-inpatient-coinsurance-days-61-90] daily. The daily copay for days 91 through 120 is [GCBB#part-a-inpatient-coinsurance-days-91-120].
The last change to Medicare Part A is the copay for a skilled nursing facility. The deductible covers the first 20 days. Days 21-100 will require a daily copay of [GCBB#part-a-snf-copay-days-21-100].
Medicare Part B
This Part of Medicare impacts nearly all Medicare beneficiaries. The changes reflected for Medicare Part B are all positive, as they say, a decrease. As mentioned above, the standard Part B premium was reduced from $170.10 to $174.70. The calendar year Part B deductible is also being lowered next year to $240.
Medicare Part C
This Part of Medicare provides beneficiaries another way to receive their Medicare benefits. Since private insurance companies like Humana and UnitedHealthcare administer Medicare Advantage plans, their premiums and out-of-pocket costs will vary depending on the chosen program and the company. Nationwide the average premium of a Medicare Advantage plan in 2023 will be $18.
Medicare Part D
Part D prescription drug coverage also has varying costs depending on the company and plan selected. The average Part D premium for next year will be $31.50. However, companies must follow a few changes to the standard Medicare model. They must provide coverage as good or better than the standard model.
The new numbers for the standard model are below:
- Deductible increased to $505
- The drug costs to reach the coverage gap are now $4,660
- To move from the coverage gap to the catastrophic phase, the TROOP for 2023 will be $7,400
A few other changes are impacting Part D of the Inflation Reduction Act. The changes will allow the HHS Secretary to start negotiating drug costs and will cap insulins at $35 for a one-month supply.. They will also remove the cost-share for vaccines in 2023.
The next several years will roll out several other Part D changes related to the IRA.
High-Income Beneficiaries Could Pay More
High-income beneficiaries could pay even higher premiums for Medicare Part D and Part B.
The Income-related Monthly Adjusted is based on their tax returns. The numbers differ depending on filing as an individual or a joint return.
Suppose you’re affected by an IRMAA adjustment. In that case, you can expect to pay an additional amount on top of your Part D and Part B premiums.
What is the cost of Medicare Part B in 2023?
The Medicare Part B premium will decrease to $174.70.
Will Medicare Part B premiums rise in 2023?
No! Medicare is lowering the Part B premium by about $5 monthly.
How much will Medicare premiums increase next year?
While the Medicare Part A premiums will increase to $505 or $278 depending on how many quarters you paid into Medicare taxes. Medicare Part B premiums will be decreasing.
What is the difference between Medicare Part A and Medicare Part B?
Medicare Part A is Hospital care services and inpatient insurance coverage. Medicare Part B covers outpatient healthcare and medical services. When someone refers to Original Medicare, they typically are referring to Medicare Part A and Part B.
Finding Help with Medicare Coverage and Costs for 2023
Finding the right health insurance coverage depends on your situation. Since everyone’s needs are different, there isn’t a one size fits all plan. We can help find a plan that fits your needs and determine if you are in an Open Enrollment Period or need a Special Enrollment Period to select coverage.
Fill out our online request form, or give us a call. We’re here to help all American retirees understand their options. Regardless of which coverage you’re looking for, we can help.