From an entitlement program standpoint, 2023 is going to be a very good year for retirees! Not only will seniors receive a nice 8.7 percent cost-of-living increase in their Social Security retirement benefits — the largest since 1981 — the Centers for Medicare and Medicaid Services also recently announced that the Medicare Part B standard monthly premium will be lowered 3 percent ($5.20) from the current rate of $170.10 per month, to $164.90 per month in 2023.
The reason for the reduction is a correction to last year’s hefty Part B premium increase, which was larger than it needed to be. The 2022 premium hike of about 14.5 percent was announced amid uncertainty about the potential impact of a new Alzheimer’s drug called Aduhelm, which threatened to explode Medicare costs. That didn’t happen. The cost of the drug was cut roughly in half from an original $56,000 a year, and Medicare sharply limited coverage. This created a large financial reserve for Part B, allowing the program to reduce next year’s premium.
You’ll also be happy to know that in addition to the premium reduction, the annual deductible for Medicare Part B will also be lowered $7 from $233 in 2022, to $226 in 2023. And if you have a Medicare Part D prescription drug plan, the average premium in 2023 will be about $31.50, which is a 1.8 percent decrease from $32.08 in 2022.
But the news isn’t all rosy. The deductible for Medicare Part A (hospital coverage) per benefit period (which generally starts when you are admitted to the hospital) will be $1,600 in 2023, up $44 from this year’s $1,556. That applies to the first 60 days of inpatient care. For the 61st through 90th day, the coinsurance will be $400 per day, up from $389 this year. And for days 91 to 150, the charge will be $800 per day (up from $778 in 2022).
And the skilled nursing facility coinsurance for days 21-100 will also increase to $200 per day, up from $194.50 in 2022.
Wealthy Beneficiary Breaks
High earning Medicare beneficiaries, which make up about 7 percent of all Medicare recipients, will also receive a break in 2023. Medicare surcharges for high earners are based on adjusted gross income from two years earlier, which means 2023 Part B premiums are determined by 2021 annual income.
So, if your 2021 income was above $97,000 up to $123,000 ($194,000 up to $246,000 for married couples filing jointly), your 2023 Part B monthly premium will be $230.80, down from $238.10 in 2022.
Monthly premiums for singles with an income between $123,000 and $153,000 ($246,000 and $306,000 for joint filers) will decrease from $340.20 to $329.70 in 2023.
Individuals earning above $153,000 up to $183,000 ($306,000 to $366,000 for joint filers) will see their monthly premium decrease from $442.30 to $428.60 in 2023.
Those with incomes above $183,000 up to $500,000 ($366,000 to $750,000 for joint filers), your 2023 Part B premium will be $527.50, down form $544.30 in 2022.
And single filers with income of $500,000 or more ($750,000 or more for joint filers) will pay $560.50 per month next year, versus this year’s premium of $578.30.
High-income beneficiaries with a Medicare Part D prescription drug plan will also pay a little less next year. If your income was over $97,000 ($194,000 for joint filers) you’ll pay a $12.20 to $76.40 monthly surcharge on top of your regular Part D premiums based on your income level.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.