Medicare beneficiaries are getting back some of the premium increases they had to swallow this year.
The Centers for Medicare & Medicaid Services (CMS) announced that 2023 monthly Part B premiums will decrease to $164.90 from $170.10, the first decline in a decade that only partially offsets the double-digit percentage increase in the 2022 premium.
The annual Part B deductible will also dip, to $226 from $233. Part B covers doctors, medical equipment and other outpatient expenses not covered by Medicare Part A.
“The smaller Part B premium reflects the unusual situation surrounding Aduhelm, the contentious, and costly, drug for treating Alzheimer’s. Medicare decided not to fully cover the drug after making the decision to put through a very large 14.5% increase in the Part B premium this year,” Mark Miller, author of the forthcoming Retirement Reboot: Commonsense Financial Strategies for Getting Back on Track, told Yahoo Money. “That wound up essentially being an overcharge this year, so this decrease for 2023 really is a refund.”
Pair that decrease with the expected 8.7% increase in Social Security’s annual cost-of-living adjustment (COLA), which will be announced October 13, and most older Americans will have a sizable boost in their monthly retirement income next year. Part B premiums typically are deducted from monthly Social Security benefits.While this windfall might not totally mitigate the impact inflation has had this year, it certainly is a buffer.
“This is a great one-two punch to help seniors fight back against the worst inflation we've seen in 40 years,” Philip Moeller, a Medicare and Social Security expert and principal author of the “Get What’s Yours” series of books about Social Security, Medicare, and health care, told Yahoo Money. “In combination with the Inflation Reduction Act and other recent changes to government rules, Medicare users are getting the best break on health care in a long time.”
There are some increases, though
To be clear, not all Medicare costs will drop.
The annual Part A deductible for in-patient hospital expenses and coinsurance costs will rise next year. The deductible will increase by $44 to $1,600 next year from $1,556. The Part A inpatient hospital deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period.
In 2023, beneficiaries must pay a coinsurance amount of $400 per day for day 61 through 90 of a hospitalization in a benefit period — up from $389 in 2022 — and $800 per day for lifetime reserve days, up from $778 in 2022. For beneficiaries in skilled nursing facilities, the daily coinsurance for days 21 through 100 of extended care services in a benefit period will be $200.00 in 2023. That’s up from $194.50 in 2022.
High-income surcharges for next year also were announced. Since 2007, a beneficiary’s Part B monthly premium is based on his or her income. About 7% of Medicare users earn too much to qualify for the standard Part B and Part D premiums, and must pay the surcharges. Details can be found at the CMS fact sheet.
Medicare Open Enrollment and Medicare Savings Programs
Medicare health and drug plan costs and covered benefits adjust annually.
Open Enrollment for 2023 will begin on October 15 and end on December 7. During this time, people who are eligible for Medicare can compare 2023 coverage options between Original Medicare, Medicare Advantage, and Part D prescription drug plans. The new plan details are scheduled to be announced October 1 and will then be available on Medicare’s plan finder.
To reduce Medicare costs including deductibles and copayments, low-income seniors and adults with disabilities may qualify to receive financial assistance from the Medicare Savings Programs (MSPs).
Kerry is a Senior Columnist and Senior Reporter at Yahoo Money. Follow her on Twitter @kerryhannon