What’s New (and Where You’ll Save) on Medicare in 2023
From lower premiums to increased cost coverage for certain medications, 2023 is all about savings. Here’s where Medicare costs have gone down and ways you can save on coverage
With U.S. inflation recently hitting a 40-year high, any news about decreasing costs makes welcome headlines. And that’s just what’s happening with some significant aspects of Medicare in 2023.
Read on to see how the Inflation Reduction Act of 2022, alongside some unrelated fiscal factors, could leave more money in your pocket thanks to reduced Medicare premiums, increased coverage for certain medications, and an elevated threshold for high-income surcharges.
Lower Premiums and Deductibles
In September, the Biden-Harris Administration announced that people with Medicare will see lower average premiums for Medicare Part B, Medicare Advantage, and Medicare Part D prescription drug plans in 2023.
The standard Part B premium is decreasing from $170.10 per month in 2022 to $164.90 for 2023. This first year-over-year decrease since 2012 results from lower-than-expected Medicare Part B spending in 2022. This was in part due unexpectedly low spending on new Alzheimer’s drug Aduhelm - a significant driver of a hefty Part B rate hike in 2022. This left a surplus that is being used to decrease 2023 premiums. However, the 2023 Part B premium is nonetheless considerably higher than that of 2021, when it had been $148.50 per month.
The average monthly premium for standard Part D coverage is projected to be $31.50 in 2023, compared with the current $32.08, according to the Centers for Medicare & Medicaid Services (CMS). Meanwhile, CMS predicts that the average Medicare Advantage (Medicare Part C) premium - that is, over and above the cost of Part B - will be around $18 per month in 2023, down from $19.52 per month in 2022. Average Advantage premiums, which were $23 per month as recently as 2020, have been declining for several years.
The Part B deductible is also being reduced, from $233 to $226 - the first Part B deductible decrease since 2012. (Medigap Plans C and F, which cover part of the Plan B deductible, are no longer available for newly eligible Medicare enrollees.) However, the maximum allowable deductible for stand-alone Part D prescription drug coverage is increasing from $480 in 2022 to $505 in 2023, with the out-of-pocket spending threshold swelling from $7,050 to $7,400.
Cheaper Insulin and Vaccines
The Inflation Reduction Act, signed into law in August, will result in lower costs to Medicare enrollees for insulin and vaccines. Starting in 2023, people with Medicare who take insulin covered by their prescription drug plan or through a traditional pump covered under Original Medicare will pay no more than $35 in cost-sharing for a month’s supply of each covered insulin product. Further, Medicare enrollees will not pay a deductible with respect to each covered insulin product.
Additionally, people with Medicare drug coverage will pay nothing out-of-pocket for adult vaccines recommended by the Advisory Committee on Immunization Practices, including the shingles vaccine and the tetanus-diphtheria- whooping cough vaccine. The lower costs of insulin and vaccines should impact more than 64 million people, according to an October press release from the Department of Health and Human Services (HHS).
The Inflation Reduction Act also enables Medicare to be able to negotiate drug prices directly with manufacturers, ensuring that enrollees will pay less for some of the most expensive prescriptions. The first 10 drugs to be negotiated, chosen from a list of the highest-spending, brand-name Medicare Part D drugs that have no competition, will be announced in 2023.
High-income Premium Adjustments
Medicare beneficiaries with higher incomes typically pay more for Part B and Part D. For years, the high-income brackets started at an income of $85,000 ($170,000 for a married couple). But since 2020 these have been adjusted for inflation.
Accordingly, the current economy has resulted in a significant increase in the high-income threshold for 2023, when it will be $97,000 for an individual (up from $91,000) and $194,000 for a married couple (up from $184,000). Note that the surcharge will be based on an enrollee’s 2021 tax returns, the most recent on file at the start of 2023, but an appeals process is in place if your income has changed in the interim.
High-income Medicare beneficiaries also pay slightly higher Part B premiums than “regular” enrollees, but these too are reduced for 2023. High-income beneficiaries will now pay Part B premiums ranging from $230.80 per month to $560.50 per month, down from $238.10 per month to $578.30 per month in 2022.
More User-friendly
CMS is continuing to introduce enhancements to medicare.gov intended to make choosing a Medicare plan during Open Enrollment a more streamlined and user-friendly experience. A redesigned home page plus refinements to pricing details and policy comparison features are making it easier to navigate all the information and options that will shape your choices of health and drug coverage, as well as finding appropriate health providers. Head to medicare.gov by Dec. 7 to see just how much you could save in 2023, when it looks like we’ll all need some inflation-defying relief.
-Paul Rogers