The Fall of Medicare Part B Premium 2023; What You Should Know

Medicare Parts A and B have annual cost-sharing, deductible, and premium adjustments made by the Centers for Medicare & Medicaid Services (CMS). Medicare Part B‘s premiums and deductibles have been steadily rising for a long time, including in recent years. The Medicare Part B premium and deductible for the year 2023 have recently been made public by CMS.

What is Medicare Part B?

Medicare Part B, also called medical insurance, pays for preventive and emergency medical care. Outpatient care accounts for the vast majority of Part B care. Part B also covers long-lasting medical equipment. Ambulance, mental health, and even outpatient prescription drugs may be covered under Part B. As a result, Medicare recipients rely heavily on Medicare Part B for most of their medical care.

The Fall of Medicare in 2023

Medicare spending decreases are highly uncommon, but they have occurred in the past. A $50 annual deductible and a $3 monthly Part B premium were the original Medicare costs in 1966. It has been business as usual for Medicare Part B premiums and the yearly deductible to go up or stay the same over the years. Those conditions shifted in 2012.

As previously mentioned, the physician fee formula was the primary factor in 2012’s decrease. The Medicare and Medicaid Extenders Act of 2010 stipulates a 29.5% cut to the formula used to determine Medicare physician payments in 2012.

As a result of medical costs reduction, the premium and deductible for the beneficiaries were lowered that year. The previous yearly deductible of $162 is now only $140.

Part B Medicare premiums will decrease from $170.10 per month in 2022 to $164.90 per month in 2023. There will be a $226 deductible per year, decreasing from the $233 deductible in 2022.

The previously announced Medicare changes for 2023 are primarily the result of the new Alzheimer’s drug Aduhelm. Medicare Part B premiums in 2022 were projected to be as high as $56,000 annually per patient, resulting in a $33 increase in annual Part B premiums.

Therefore, in 2022, the monthly premium for Medicare Part B will be $26.30. In the same year, the $266 annual deductible for Medicare Part B recipients was increased by $30.

In April, Medicare announced that it was considering whether or not to cover Aduhelm outside of approved clinical trials. Because of this revision, the regular monthly premium and the yearly deductible are now cheaper. All Medicare recipients will see a reduction in out-of-pocket expenses beginning in 2023.

The Centers for Medicare & Medicaid Services (CMS) recently released a fact sheet outlining significant alterations to Medicare and Medicaid in the upcoming year. Among the themes discussed in this document are the following:

  • About 7% of people receiving Medicare Part B are subject to the Income-Related Monthly Adjustment Amounts (IRMAA).
  • Beneficiaries who had a kidney transplant for more than 36 months but are no longer eligible for full Medicare coverage will be able to pay a premium beginning in 2023. This would enable them to maintain Part B coverage of immunosuppressive medications. The cost of immunosuppressant drugs will increase by $97.10 in 2023.
  • Medicare Part A monthly premiums will increase by $4 to $278 in 2023 for those insured for at least 30 consecutive quarters or married to someone.

When will the new Part B premiums begin to be charged to Medicare beneficiaries?

New premiums and deductibles will not take effect until January 2023, despite CMS’s announcement of the new rates. These changes to the premium and deductible will take effect at the beginning of 2023. The 15th of October marks the beginning of Medicare Open Enrollment, and the 7th of December 2022 marks its conclusion. In preparation for open enrollment, Medicare Advantage members (subject to the new law’s increase in Part B premiums) should review the premium and cost-sharing information made available by their plan provider. 

Already, some online communities are griping that the 2023 savings for Medicare recipients will be negligible. Don’t complain. Keep a good disposition. If you’ve been saving, consider joining a retiree organization like NARFE or AARP with the money you’ve set aside. Both organizations can help you learn how to get the most out of your retirement savings.

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Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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