will Medicare premiums increase in 2023?
On September 27, 2022, the Centers for Medicare & Medicaid Services (CMS) released the 2023 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs, and the 2023 Medicare Part D income-related monthly adjustment amounts.
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.
In 2023, Medicare Part A will cost slightly more, while Part B and Medicare Advantage prices will be lower.
Medicare Part A covers inpatient hospital, skilled nursing facility, hospice, inpatient rehabilitation, and some home health care services. About 99 percent of Medicare beneficiaries do not have a Part A premium since they have at least 40 quarters of Medicare-covered employment.
Most people aged 65 and older don’t pay a Part A premium. This is because the government charges workers Medicare taxes over the duration of their career and uses the money to cover these costs.
Medicare Part A costs are increasing by an overall average of 3% for 2023, which is lower than last year’s increase.
All Medicare Part A costs are increasing for 2023, including the deductible, coinsurance and premiums.
Most people get Medicare Part A for free and are enrolled automatically when they turn 65. But if you have to pay for Part A, your premiums typically increase yearly.
Part A cost | 2022 amount | 2023 amount | % increase |
|---|---|---|---|
| Hospital deductible | $1,556 | $1,600 | 3% |
| Hospital coinsurance days 61-90 | $389 | $400 | 3% |
| Hospital coinsurance days 91+ | $778 | $800 | 3% |
| Skilled nursing facility coinsurance days 21-100 | $194.50 | $200 | 3% |
| Monthly rate: Paid Medicare taxes less than 30 quarters | $499 | $506 | 1% |
| Monthly rate: Paid Medicare taxes for 30-39 quarters | $274 | $278 | 1% |
Part A premiums only apply if you paid Medicare taxes for less than 40 quarters.
You must pay a Part A deductible for each hospital admission. That amount will be $1,600 in 2023, an increase of $44 over 2022.
will Medicare Part B premium increase 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.
Part B is the main part of original Medicare that covers doctor’s services and many other types of non-hospital care. (Part A covers hospital services, and most beneficiaries don’t pay a premium for Part A care.) Every beneficiary in Part B pays a premium, though lower-income beneficiaries can qualify for assistance.
Part B, referred to as medical insurance, covers outpatient care, medical equipment such as wheelchairs and walkers, and many preventive services such as screenings, vaccines and yearly “wellness” visits, CMS says.
Though Part B is optional, most people have both Parts A and B, CMS says.
The Part B premium took a 14.5% leap from 2021 to 2022 to $170.10. The increase was due to several factors, but $10 of this $22 increase was to establish a reserve to pay for possible coverage of the then-new Alzheimer’s drug, Adulhelm. The Centers for Medicare and Medicaid (CMS) subsequently decided to limit coverage for the drug, and the manufacturer reduced the price.
In 2023, the base Part B Medicare premium will decline to $164.90 in 2023, a $5.20 decline from 2022’s $170.10 monthly premium. Also, the annual Part B deductible will decline to $226 in 2023 from $233 in 2022, according to CMS.
| Full Part B Coverage | |||
| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Income-Related Monthly Adjustment Amount | Total Monthly Premium Amount |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 | $164.90 |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | $65.90 | $230.80 |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | $164.80 | $329.70 |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | $263.70 | $428.60 |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | $362.60 | $527.50 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | $395.60 | $560.50 |
Medicare Part D
Medicare Part D is the optional prescription drug benefit. It’s also offered through private companies approved by Medicare.
Part D premiums vary depending on the plan you have. But CMS did announce in July that the average basic monthly premium for Medicare Part D is projected to decrease by 1.8% from $32.08 in 2022 to $31.50 in 2023.
Again, your premium may rise in 2023, since each policy is different.
Additionally, about 8% of people with Medicare Part D who have an individual income of more than $97,000 or a joint income of over $194,000 will pay more in monthly premiums.
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 |
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