The Medicare program recently made history for the second year in a row, but it was good news for beneficiaries this time! At the beginning of this year, beneficiaries witnessed the largest Part B premium increase in the history of the program when it went up nearly 15%. The unexpected hike was a blow to fixed-income budgets across the country.
However, at the end of September, the Centers for Medicare and Medicaid Services (CMS) announced the new Medicare premiums and deductibles for 2023. For the first time in history, Part B premiums are going down in the upcoming year!
Today, we’ll explore the premiums, deductibles, and coinsurance costs you can expect from Parts A and B in 2023.
Every person on Medicare pays a premium for Part B unless they’re eligible for financial assistance programs. This year, the standard premium is $170.10, which was up nearly $22 from last year. CMS cited increasing healthcare costs and potential coverage of the newly-approved Alzheimer’s drug, Aduhelm, as the reasons for the increase.
As it turned out, the program spent much less than predicted over the last year. CMS recommended the program pass those savings onto beneficiaries. So, without further ado, the good news! In 2023, the Part B standard premium is decreasing to $164.90 per month - a savings of $5.20. True, that might not sound like much, but it’s certainly better than the alternative.
While most beneficiaries pay the standard premium, people who have higher incomes are subject to IRMAA, the Income-Related Monthly Adjustment Amount. If this applies to you, you’ll also notice a change in that amount. First, the income thresholds are going up. (This is a good thing!) In 2022, a single couple filing jointly was subject to IRMAA if they earned a combined adjusted gross income of more than $182,000. Next year, the first threshold begins at $194,000.
On top of all that, the Part B deductible is also decreasing. This year (2022), it is $233, but it will be lowered to $226 in 2023. The Part B deductible applies once per calendar year.
We don’t have the same great news about the Medicare Part A numbers, but most beneficiaries won’t notice these changes. The majority of people do not pay a premium for Part A. As long as you’ve worked and paid taxes for 40 quarters, you get to enjoy premium-free Part A. If you haven’t met that requirement, you pay a premium, which will increase in 2023. Someone who has worked at least 30 quarters will pay $278. People with less than 30 quarters will pay the full premium of $506 per month.
CMS is also increasing the Part A deductible. Starting in 2023, it will be $1,600 per benefit period. This is different than the Part B deductible, which is only paid annually. A “benefit period” for Part A begins on the first day of your inpatient admission and ends when you’ve been out of the hospital for 60 consecutive days.
Part A also requires coinsurance amounts based on how long you’ve been hospitalized. Medicare covers the first 60 days, but days 61 through 90 will cost $400 per day. This is up from $389 in 2022. If you’re hospitalized for more than 90 days, and you have any of the lifetime reserve days to use, your coinsurance cost is $800 per day, up from $778 in 2022.
Coinsurance amounts for an inpatient stay in a skilled nursing facility are slightly different. In that situation, the first 20 days are covered by Medicare, and then you pay $200 per day from day 21 through day 100. This amount increased from $194.50 in 2022.
Like the Part A premium, many people won’t notice the change in Part A deductible or coinsurance amounts. Beneficiaries typically enroll in either a Medicare Supplement or Medicare Advantage plan and will pay different (less) amounts for hospitalization.
If you have questions about the new 2023 Medicare premiums, please talk with one of our independent insurance agents at Local Medicare Specialists. We can explain these changes and also review your other Medicare plans for the upcoming year.
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