Good news for Medicare beneficiaries! On September 27, the Centers for Medicare and Medicaid Services (CMS) announced the Medicare premium and deductible updates for 2023. For the first time since the program was created, the Part B premium is going down! This comes after a substantial increase in 2022.
Let’s take a look at how Medicare Parts A and B are changing in the new year.
Medicare Part B 2023 Updates
Changes to the Part B premium and deductible are often the most important and impactful for beneficiaries. Every person enrolled in Part B pays a premium unless they qualify for financial assistance. In 2022, the standard premium saw a drastic increase of nearly $22 per month – the highest rate increase in Medicare’s history. The unexpected hike was due to the newly-approved Alzheimer’s drug, Aduhelm, as well as the increasing healthcare costs.
Fortunately, Aduhelm has not been as costly to the program as was predicted. That, paired with other decreased spending, has left a greater reserve in the Supplementary Medical Insurance Trust Fund. This trust is what funds Medicare and pays for beneficiaries’ treatments and services. Because of these two factors, CMS recommended the program pass those savings down to the beneficiaries. In 2023, the new Part B premium will be $164.90, a decrease of $5.20 per month.
In addition, the thresholds for IRMAA are also being changed. IRMAA stands for the Income-Related Monthly Adjustment Amount. Individuals with high incomes get IRMAA added to their Part B premium. The amount that is tacked on depends on just how high the income is. In 2022, the first thresholds began at $91,000 for a single individual and $182,000 for married couples filing jointly and added $68 onto the standard premium. In 2023, the first thresholds begin at $97,000 and $194,000 and add on an additional $65.90. Due to these new numbers, individuals may find their IRMAA status changes in 2023.
The Part B deductible also decreases next year. It’s currently at $233 and will be lowered to $226 in 2023.
Medicare Part A 2023 Updates
Unfortunately, we don’t have the same great news about Part A. However, the majority of people will not be impacted by these changes since most beneficiaries enjoy premium-free Part A. If you aren’t one of those people, you’ll see an increase in your monthly premiums.
Part A is premium-free for anyone who worked and paid Social Security taxes for at least 40 quarters (ten years). For those who have not met that requirement, premiums in 2023 are going up. If you worked at least 30 quarters, you’d pay $278. Anything less than that, and you’ll pay the full premium, which is $506 next year.
The Part A deductible and coinsurance are also increasing. The new deductible is $1,600, which applies to every benefit period. A benefit period begins the day you become an inpatient and ends when you’ve been out of the hospital for 60 consecutive days. This is unlike the Part B deductible, which is only paid annually.
Coinsurance costs for Part A depend on how long you’ve spent in the hospital or skilled nursing facility. In a hospital, the first 60 days require no copayment. Days 61 through day 90 will cost $400 per day. After day 90, if you have any lifetime reserve days remaining, you pay $800 for each of those days. In a skilled nursing facility, the first 20 days do not require a copay. Then, from day 21 through day 100, you pay $200 per day. All of these amounts are greater than they were for 2022.
If you’d like to learn more about Medicare changes in 2023, call our office and speak to a licensed agent. We’ll answer all your questions and review your plans to make sure you’re where you need to be in the new year.