Millions of seniors who had to pay high increases in Medicare premiums this year will get a break in 2023 when they see a rare drop in monthly premiums for Medicare Part B.
How much you'll save
The rate decrease is 3%, which will reduce what most people pay for a variety of outpatient care by $5.20 -- to $164.90 a month.
Single Medicare enrollees who earn $97,000 or less are charged the standard premium, while couples who file jointly will pay the standard premium if they earn $194,000 or less.
If you earn above that amount, however, you will have to pay higher premiums. For example, if you are a single taxpayer who earns more than $97,000 but up to $123,000, you will pay $230.80 a month for Part B coverage in 2023, according to the Centers for Medicare & Medicaid Services.
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The annual deductible for Part B will decline to $226 in 2023, which is down $7 from the 2022 deductible of $233.
Spending on other Medicare and Medicaid services has also been lower than expected this year. In addition to the rate decrease, the program's deductible will drop to $226 from $233.
This is good news for seniors who will be required to pay a lower out-of-pocket amount before Medicare coverage kicks in. This amounts to about $84 less in annual out-of-pocket spending for seniors.
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Why is the deductible decreasing in 2023?
Last year, consumers faced a $21.60 monthly increase, in part because of the costs of the new controversial Alzheimer's drug Aduhelm. Since then, Medicare set limits on the drug's use and the drugmaker has cut the $56,000 price tag in half. That led to Medicare paying less than expected, the Associated Press reported.
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These fee cuts come at the same time as seniors receive a
Social Security cost-of-living increase for 2023 of up to 9% or 10%, according to the AP.
"That's something we may never see again in the rest of our lives," Mary Johnson, the Social Security and Medicare policy analyst for The Senior Citizens League, told the AP. "That can really be used to pay off credit cards, to restock pantries that have gotten low because people can't afford to buy as much today as they did a year ago and do some long-postponed repairs to homes and cars."
The exact amount of the Social Security increase affecting 66 million Americans will be announced next month, the AP reports.
President Joe Biden spoke in the Rose Garden on Tuesday about the lower premiums and additional savings seniors will receive through coverage of vaccines due to the Inflation Reduction Act passed by Congress this year. That legislation also caps insulin copayments at $35 for Medicare recipients and eventually will lead to some lower drug prices.
"[To] millions of seniors and people with disabilities on Medicare, that means more money in their pockets while still getting the care they need," Biden said.
For more on the costs of Medicare coverage, click here.
