Medicare beneficiaries got a bit of good news recently when The Centers for Medicare and Medicaid Services (CMS) released their updates for 2023. While some numbers increased, the two most impactful to most beneficiaries saw an unexpected decrease.
Medicare Part B Changes
Let’s start with the most exciting news. Last year, the Medicare program introduced the highest premium increase it’s seen since its launch of the program in 1965. Beneficiaries were left with a nearly $22 increase from 2021. At that time, CMS cited rising healthcare costs and the release of the recently-approved Alzheimer’s drug, Aduhelm, as the cause.
Fortunately, Adulehm did not cost the program as much as expected. In addition, the Supplementary Medical Insurance Trust Fund (how Part B is funded) has a larger reserve due to lower costs for Part B services. Therefore, CMS recommended the Medicare program pass on those savings to the beneficiaries.
What does all that mean? That means, for the first time ever, the Medicare Part B premium is decreasing in the new year. Starting in 2023, the standard Part B premium will be $164.90, a decrease of $5.20.
Those who have been subject to the Income-Related Monthly Adjustment Amount (IRMAA) may also find themselves in a lower tier next year. Beneficiaries with higher incomes pay an adjusted premium for both Part B and Part D. The first threshold for 2023 begins at $97,000 for individuals and $192,000 for married couples filing jointly. (The Social Security Administration looks at your adjusted gross income from two years prior to the year of coverage. For the 2023 premiums, they’ll look at your 2021 AGI.) Previously, those thresholds were $91,000 and $182,000, respectively.
In addition to the premium changes, the Part B deductible will also be lowered in 2023. It’s going to drop from $233 to $226 – a $7 savings for beneficiaries.
Medicare Part A Changes
Unfortunately, we won’t see those same helpful changes in Part A. However, most people enjoy premium-free Part A and therefore won’t be impacted by some of the changes. You’ll continue to have premium-free Part A if you worked and paid taxes for ten years (or 40 quarters). If you do not meet those requirements, your new monthly premium is as follows:
- 30 or more quarters: $278
- Less than 30 quarters: $506
The Part A deductible is also increasing from $1,556 to $1,600. It’s important to remember that this is a “benefit period” deductible, not an annual one. A benefit period begins on the day of your inpatient admission and ends when you’ve been out of the hospital for 60 consecutive days. You could pay the Part A deductible more than one time per year.
Coinsurance costs under Part A are dependent on how many days you’ve been an inpatient. It also depends on what type of facility you’re staying in. For a hospital stay, Part A will cover the first 60 days at no cost. Then, you’ll pay $400 per day from day 61 to day 90 (up from $389 in 2022). If you have any lifetime reserve days left after day 90, you’ll pay $800 per day (up from $778 in 2022). For a skilled nursing facility stay, Medicare covers the first 20 days at no cost to you. You’ll pay $200 from day 21 through day 100 (up from $194.50 in 2022).