Are My Medicare Premiums Going Up in 2023?
Are you wondering how much Medicare premiums will increase for 2023? Rising inflation coupled with a 14.5% Medicare Part B premium increase from 2021 to 2022 raises concerns about Medicare premiums in 2023.
On September 27, 2022, the Centers for Medicare and Medicaid Services (CMS) announced the new Medicare rates for 2023.
TIP: Even though Medicare rates are going down, using our Medicare plan finder tool can still end up saving you money on premiums, copays, deductibles and more!
Medicare Part B Premium
The Medicare Part A premium is free for most beneficiaries, but the Medicare Part B premium is always required. If you are collecting Social Security (SS) or Railroad Retirement Board (RRB) benefits when you become Medicare-eligible, your monthly benefit payments will automatically be reduced by the Part B premium amount.
The standard Part B monthly premium in 2021 was $148.50, and in 2022, the amount increased to $170.10. The good news is that part B premiums will only be $164.90 in 2023, that’s a decrease of $5.20 per month. Understanding what propelled the 2022 premium increase can give you a sense of what to expect in 2023.
TIP: Check out our 2023 Medicare Premium and Deductible chart for the latest cost of living news.
Why Did Premiums for Medicare Increase in 2022?
A contributing factor to the 2021-to-2022 Medicare Part B premium increase was the introduction of a drug called Aducanumab (generic version). Biogen manufactures the drug under the brand name, Aduhelm, which the Federal Drug Administration (FDA) approved in June 2021 to treat Alzheimer’s disease. The FDA press release said, “Aduhelm represents a first-of-its-kind treatment approved for Alzheimer’s disease.
Aduhelm quick facts:
- FDA approved
- New treatment for early-stage Alzheimer’s disease
- Helps slow cognitive decline
- Administered via IV infusion
- Requires MRI or PET scan before and during treatment
The drug initially came with a hefty price tag of $56,000. Medicare covers Aduhelm only for beneficiaries participating in clinical trials approved by the Centers for Medicare & Medicaid Services (CMS), National Institutes of Health (NIH), or the FDA. Coverage of clinical research studies falls under Part B.
Part of the reason for Medicare’s premium hike in 2022 was to defray the anticipated cost of Aduhelm coverage. According to KFF, “CMS attributed about half of the premium increase to the need to boost revenues to cover higher projected Part B spending for this one drug alone.”
TIP: Discover how to make smart financial decisions when navigating Medicare costs.
Are Medicare Premiums Lowering in 2023?
The New York Times noted that after the sizable Medicare Part B premium increase was announced in 2021, followed by public protest rallies, some hospitals and doctors refrained from prescribing the drug. After the premium increase went into effect, the manufacturer announced it was cutting the price of Aduhelm to $28,200, based on a lower demand than predicted.
An article in U.S. News cited a CMS report that “said the premium recommendation for 2022 would have been $160.40 a month had the price cut and the coverage determination both been in place when officials calculated the figure.” But a midstream change in the 2022 Medicare Part B premium would be unprecedented. However, it’s been confirmed that the cost savings will be passed along to Medicare recipients through lower 2023 Medicare Part B premiums.
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2023 Medicare Annual Deductible
The 2021 to 2022 Medicare Part B annual deductible saw a rate hike from $203.00 to $233.00. This $30.00 increase was also due to the initial projected cost of Aducanumab, the generic name for Aduhelm.
The Medicare annual deductible amount for part B beneficiaries is also decreasing due to the lower cost of the Alzhimer’s drug. The annual deductible in 2023 will be $226.00, which represents a $7.00 reduction compared to 2022 rates.
Medicare Income Limits
Though most people pay the standard Medicare Part B premium, beneficiaries earning a modified adjusted gross income (MAGI) within specific ranges must pay an additional income-related monthly adjustment amount (IRMAA). The data the Social Security Administration (SSA) uses for this calculation is the income you reported on your tax return two years back, typically the most recent tax return the IRS provides to the SSA. The SSA also takes into account how you filed.
For example, based on the 2022 income chart, if you filed individually and your 2020 MAGI was over $91,000 but no more than $114,000, or if you filed as a married couple and your MAGI was between $182,000 and $228,000, you would pay $68 per month above the Medicare Part B standard premium.
The IRMAA also applies to your prescription drug plan; in this example, you would pay $12.40 above your Part D monthly premium. In the fall of 2022, stay tuned for the announcement of the 2023 Medicare income limits.
Medicare Coverage Options
All Medicare recipients are responsible for the Part B premium, but you can choose how you want to receive your Medicare benefits. As you navigate Medicare plans and benefits, think through your current and projected healthcare needs relative to Medicare costs.
Here are points to consider:
- Medicare Advantage (MA) is an alternate way to get Part A and Part B. MA plans often include Part D. Depending on the insurer and location, you may be able to find a premium-free MA plan, but be sure to factor in the cost of deductibles, coinsurance and co-payments.
- Medicare Supplement Insurance covers some or all out-of-pocket costs, depending on which of the 10 Medigap policies you select. However, premiums can be high, depending on the level of benefits and your location. You must also buy a Part D plan for prescription drug coverage.
There are multiple facets to Medicare. For example, enrollment timing is different for MA plans than supplemental plans. MA plans offer an annual open enrollment period between January 1st and March 31st, whereas Medicare Supplement Insurance provides a one-time Medigap Open Enrollment Period.
TIP: Read our Top 7 Reasons to Switch Your Medicare Advantage Plan guide.
Online Plan Finder Tool
Now that you’ve had a chance to learn about the 2023 Medicare rates, you may decide it’s time to make a change.
Whether you are new to Medicare or looking to switch plans, a licensed sales agent can share tips to help you navigate plans and benefits so that you don’t miss out on an opportunity to choose the plan you need.
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