What you will pay for Medicare premiums in 2023

What you will pay for Medicare premiums in 2023

Dear Savvy Senior,

I’ve read retirees will get a nice cost-of-living increase in our Social Security benefits next year, but what about Medicare? What will our Medicare Part B monthly premiums and other Medicare costs be in 2023?

Planning Ahead

Dear Planning,

From an entitlement program standpoint, 2023 is going to be a very good year for retirees. Not only will you receive a nice 8.7% cost-of-living increase in your Social Security retirement benefits — the largest since 1981 — but also the Centers for Medicare and Medicaid Services recently announced your Medicare Part B standard monthly premium will be lowered 3% or $5.20 from the current rate of $170.10 per month to $164.90 per month in 2023.

The reason for the reduction is a correction to last year’s hefty Part B premium increase, which was larger than it needed to be. The 2022 premium hike of about 14.5% was announced amid uncertainty about the potential impact of a new Alzheimer’s drug called Aduhelm, which threatened to explode Medicare costs. That didn’t happen. The cost of the drug was cut roughly in half from an original $56,000 a year, and Medicare sharply limited coverage. This created a large financial reserve for Part B, allowing the program to reduce next year’s premium.

You’ll also be happy to know that in addition to the premium reduction, the annual deductible for Medicare Part B also will be lowered $7 from $233 in 2022 to $226 in 2023. And if you have a Medicare Part D prescription drug plan, the average premium in 2023 will be about $31.50, which is a 1.8% decrease from $32.08 in 2022.

But the news isn’t all rosy. The deductible for Medicare Part A — hospital coverage — per benefit period, which generally starts when you are admitted to the hospital, will be $1,600 in 2023, up $44 from this year’s $1,556. That applies to the first 60 days of inpatient care. For days 61-90, the coinsurance will be $400 per day, up from $389 this year. And for days 91-150, the charge will be $800 per day, up from $778 in 2022.

And the skilled nursing facility coinsurance for days 21-100 also will increase to $200 per day, up from $194.50 in 2022.

Wealthy beneficiary breaks

High-earning Medicare beneficiaries, which make up about 7% of all Medicare recipients, also will receive a break in 2023. Medicare surcharges for high earners are based on adjusted gross income from two years earlier, which means 2023 Part B premiums are determined by 2021 annual income.

So if your 2021 income was above $97,000 up to $123,000 and $194,000 up to $246,000 for married couples filing jointly, your 2023 Part B monthly premium will be $230.80, down from $238.10 in 2022.

Monthly premiums for singles with an income between $123,000 and $153,000 or $246,000 and $306,000 for joint filers will decrease from $340.20 to $329.70 in 2023.

Individuals earning above $153,000 up to $183,000 or $306,000-$366,000 for joint filers will see their monthly premium decrease from $442.30 to $428.60 in 2023.

Those with incomes above $183,000 up to $500,000 or $366,000-$750,000 for joint filers, your 2023 Part B premium will be $527.50, down from $544.30 in 2022.

And single filers with income of $500,000 or more or $750,000 or more for joint filers will pay $560.50 per month next year, versus this year’s premium of $578.30.

High-income beneficiaries with a Medicare Part D prescription drug plan also will pay a little less next year. If your income was over $97,000 or $194,000 for joint filers, you’ll pay a $12.20-$76.40 monthly surcharge on top of your regular Part D premiums based on your income level.

For more information on Medicare’s 2023 costs, see www.medicare.gov/basics/costs/medicare-costs.

Send your senior questions to Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit www.SavvySenior.org.

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