While prices for seemingly everything have soared with inflation this year, we now know that Medicare premiums will actually decrease in 2023.
Today, the Centers for Medicare & Medicaid Services (CMS) released the 2023 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2023 Medicare Part D income-related monthly adjustment amounts.
The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022
Each year the Medicare Part B premium, deductible, and coinsurance rates are determined according to the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022. The annual deductible for all Medicare Part B beneficiaries is $226 in 2023, a decrease of $7 from the annual deductible of $233 in 2022.
The 2022 premium included a contingency margin to cover projected Part B spending for a new drug, Aduhelm. Lower-than-projected spending on both Aduhelm and other Part B items and services resulted in much larger reserves in the Part B account of the Supplementary Medical Insurance (SMI) Trust Fund, which can be used to limit future Part B premium increases.
Many thought the Part B premium would stay exactly the same as in 2022, but the decrease in the 2023 Part B premium aligns with the CMS recommendation in a May 2022 report that excess SMI reserves be passed along to people with Medicare Part B coverage.
Biden to address Medicare, Social Security
President Joe Biden was planning to travel to the retirement haven of Florida to talk about Social Security and Medicare today, but with Hurricane Ian barreling toward Tampa, Biden will instead speak from the White House.
He is expected to talk about how his administration is working to strengthen Social Security and Medicare while Republicans want to “put these programs on the chopping block,” White House press secretary Karine Jean-Pierre said during a press briefing Monday.
He is expected to trumpet the Inflation Reduction Act, which he signed into law about two weeks ago, which gives Medicare the power to negotiate lower prescription drug prices. Seniors will see their out-of-pocket costs for prescription drugs limited to a $2,000 a year.
Open Enrollment begins Oct. 15
Medicare Open Enrollment for 2023 will begin on October 15, 2022 and ends on December 7, 2022. During this time, people eligible for Medicare can compare 2023 coverage options between Original Medicare, and Medicare Advantage, and Part D prescription drug plans.
In addition to the soon-to-be released premiums and cost sharing information for 2023 Medicare Advantage and Part D plans, the Fee-for-Service Medicare premiums and cost sharing information released today will enable people with Medicare to understand their Medicare coverage options for the year ahead.
Medicare health and drug plan costs and covered benefits can change from year to year, so people with Medicare should look at their coverage choices annually and decide on the options that best meet their health needs.
To help with their Medicare costs, low-income seniors and adults with disabilities may qualify to receive financial assistance from the Medicare Savings Programs (MSPs). The MSPs help millions of Americans access high-quality health care at a reduced cost, yet only about half of eligible people are enrolled.
The MSPs help pay Medicare premiums and may also pay Medicare deductibles, coinsurance, and copayments for those who meet the conditions of eligibility. Enrolling in an MSP offers relief from these Medicare costs, allowing people to spend that money on other vital needs, including food, housing, or transportation. People with Medicare interested in learning more can visit: https://www.medicare.gov/basics/costs/help/medicare-savings-programs.
The decrease in Part B premiums for 2023 is good news for Social Security beneficiaries, who appear to be on track to receive one of the highest cost-of-living adjustments in the program’s history in 2023.
The official Social Security COLA for 2023 is scheduled to be announced on Oct. 13, when the Bureau of Labor Statistics releases CPI data for September.
The final estimate for next year’s COLA from The Senior Citizens League projects an 8.7% increase, which would raise the average retiree benefit of $1,656 by $144.10 (rounded as done by Social Security Administration). Seniors can calculate the increase by taking their gross Social Security benefit (the amount prior to deductions for Medicare premiums and any tax withholdings) and multiplying it by .087.
401k contribution limits for 2023 are also expected to be released in mid-October. The official 2023 Internal Revenue Code limits will not be determined and announced until after September Consumer Price Index for All Urban Consumers (CPI-U) values are published in October, but back in August Mercer projected the limits for 401k, 403b and eligible 457 plan elective deferrals (and designated Roth contributions) will rise from $20,500 this year to $22,500 in 2023.
SEE ALSO:
• Final 2023 Social Security COLA Estimate Before the Real Thing: 8.7%
• 2023 401k Contribution Limits: ‘Unprecedented’ Increase Projected