Starting next year, Medicare Part B premium prices are getting cheaper and Part A premiums will be a bit more expensive. Why? Because each year, the Social Security Administration adjusts costs associated with the Medicare program by raising or lowering premiums and deductibles using rules set out in the Social Security Act.
The income brackets and amounts for adjustments to Part D prescription drug coverage have also been slightly revised. Additionally, if you receive Social Security payments, the cost-of-living benefits increase for 2023 has been announced. "This means that seniors will have a chance to get ahead of inflation, due to the rare combination of rising benefits and falling premiums," Press Secretary Karine Jean-Pierre said during a White House briefing in October.
Here's how much the prices will change for those who receive Medicare Part B and Part A, and what the new costs will be next year. Note also that the open enrollment period for Medicare ended on Dec. 7.
How much less will Medicare Part B cost in 2023?
You won't see a hefty reduction in the amount you currently pay, but it will be less than what you're paying. Here's how payments break down for Medicare Part B full coverage in 2023.
Standard monthly premium: $164.90 in 2023, a decrease of $5.20 from $170.10 in 2022.
Annual deductible: $226 in 2023, a decrease of $7 from the annual deductible of $233 in 2022.
If you earn more than $97,000 as a single tax filer, or $194,000 as a joint filer, you'll have to pay a little extra for Medicare Part B. Here are the income-related adjustments for Part B full coverage in 2023.
Medicare Part B income adjustments
|Single tax filers' income||Joint tax filers' income||Monthly adjustment||Total premium|
|$97,000 or less||$194,000 or less||$0||$164.90|
|$97,001 - $123,000||$194,001 - $246,000||$65.90||$230.80|
|$123,001 - $153,000||$246,001 - $306,000||$164.80||$329.70|
|$153,001 - $183,000||$306,001 - $366,000||$263.70||$428.60|
|$183,001 - $499,999||$366,001 - $749,999||$362.60||$527.50|
|$500,000 or more||$750,000 or more||$395.60||$560.50|
Why is Medicare Part B cheaper in 2023?
The Centers for Medicare and Medicaid Services recommended in May that any excess Supplementary Medical Insurance Trust Fund money be passed along to those with Medicare Part B coverage. This is to help decrease the costs of the premium and deductibles. While most Medicare recipients get Part A for free, everyone has to pay for Part B.
This year's Part B premium was projected to cover spending for a new drug called Aduhelm, which is intended to treat Alzheimer's disease. Since less money was spent on that drug and other Part B items, there were more reserves left over in the Part B account of the SMI fund, which will now be used to limit future Part B premium increases.
Medicare Part A premiums and deductibles are going up in 2023
While Medicare Part B is seeing a decrease in premiums next year, those who have to pay for Medicare Part A will see very slight premium increases in 2023. Those who've worked more than 30 calendar quarters (but fewer than 40) will pay $278 a month, versus $274 in 2022. Those with less qualifying employment history will pay $506 a month, compared with $499 in 2022.
It's important to note that 99% of Medicare recipients don't have to pay anything for Part A because they've worked 40 calendar quarters (10 full years) while paying Medicare taxes.
The deductibles for Medicare Part A are also rising by about 2.8% each. Here's a breakdown of what's going up.
Inpatient hospital deductible: $1,600 in 2023, an increase of $44 from $1,556 in 2022.
Daily coinsurance for the 61st through the 90th day: $400 in 2023, an increase of $11 from $389 in 2022.
Daily coinsurance for lifetime reserve days: $800 in 2023, an increase of $22 from $778 in 2022.
Skilled Nursing Facility coinsurance: $200 in 2023, an increase of $5.50 from $194.50 in 2022.
What are the 2023 income adjustments for Medicare Part D?
If you receive Medicare Part D for prescription drug coverage -- which received a massive boost this year from the passage of the Inflation Reduction Act -- and earn more than a certain amount, you'll need to pay extra monthly. The adjustment amounts for each income tier haven't changed much at all from 2022, but the income brackets themselves all rose about 6%.
Medicare Part D income adjustments
|Single tax filers' income||Joint tax filers' income||Part D adjustment|
|$97,000 or less||$194,000 or less||$0|
|$97,001 - $123,000||$194,001 - $246,000||$12.20|
|$123,001 - $153,000||$246,001 - $306,000||$31.50|
|$153,001 - $183,000||$306,001 - $366,000||$50.70|
|$183,001 - $499,999||$366,001 - $749,999||$70|
|$500,000 or more||$750,000 or more||$76.40|
What do Medicare Parts A and B cover?
Medicare Part A covers inpatient hospital, skilled nursing facility, hospice, inpatient rehabilitation and some home health care services.
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment and certain other medical and health services not covered by Medicare Part A.
Medicare Part D helps cover prescription drug costs.
For more information, here's what to know about signing up for an Affordable Care Act plan.