October 24, 2022
Decreasing expenses provide financial relief needed to millions of Medicare beneficiaries
Ahead of Medicare’s Annual Election Period (AEP), the Centers for Medicare & Medicaid Services (CMS) last month announced the 2023 Medicare Part A and Part B premiums, deductibles, and coinsurance amounts, as well as the income-related monthly adjustment amounts of Medicare Part D. Each year Medicare premiums are adjusted in accordance with the Social Security Act. In the face of criticism about the rising costs of health care and overspending in CMS, premiums and deductibles are set to decrease for the first time in ten years, providing some financial relief to millions of Medicare beneficiaries.
The cost of Medicare in 2023
Most beneficiaries will continue to receive Medicare Part A (“hospital insurance”) benefits at no cost. The Part A deductible, however, will increase slightly, going from $1,556 in 2022 to $1,600 in 2023. These benefits generally cover inpatient hospital care, skilled nursing facility care, hospice care, home health care, and nursing home care. Medicare Part B (“medical insurance”) premiums will decrease by 3% – $5.20 – from $170.10 in 2022 to $164.90. In addition, the annual deductible for all Medicare Part B beneficiaries is decreasing by $7 from $233 to $226 in 2023. Medicare Part B typically covers doctor visits, outpatient services, preventative care, durable medical equipment (DME), and medically necessary services.
CMS also recently announced the 2023 costs for Medicare Part C (“Medicare Advantage”) and Part D (“Medicare drug coverage”). While CMS is not responsible for establishing monthly costs for Advantage and prescription drug plans, information is released each year to provide guidance and support for beneficiaries as they make a determination about their medical coverage for the upcoming year. CMS estimates that the average cost of a Medicare Advantage plan will be down slightly from $19.52 in 2021, averaging about $18 per month. The average cost of a Part D plan is expected to decrease as well, down from $32.08 per month in 2022 to $31.50 per month.
A Medicare decrease and a Social Security increase
Earlier this month, the Social Security Administration (SSA) announced an 8.7% Cost-of-Living Adjustment (COLA) for all Social Security and Supplemental Security Income beneficiaries in 2023. With the expected decrease in Medicare premiums in 2023, the take-home amount for Social Security beneficiaries may be larger than originally anticipated. The average disabled worker received $1,364 per month in 2022. Assuming they received their healthcare coverage through Original Medicare and prescription coverage through Part D, they would take home approximately $1,161 per month. Applying the new rates for 2023, the average disabled worker will receive $1,483 per month and can expect to take home about $1,286 per month – more than $100 per month than the previous year.
Additional cost-saving measures
In addition to the decreasing costs of Medicare premiums and a historically high COLA increase, beneficiaries will see financial relief through the Inflation Reduction Act. On August 16, 2022, President Biden signed the Inflation Reduction Act into law. Some of the provisions within the bill will work to lower healthcare costs, particularly for Medicare beneficiaries. Such provisions include:
- Negotiating with drug manufacturers to provide beneficiaries with the best cost possible on medications.
- Removing the drug costs associated with the catastrophic stage of prescription drug coverage in 2024.
- Instituting a yearly out-of-pocket cap on prescription drugs, starting at $2,000.00 by 2025. Beneficiaries will also have the option to pay costs overtime versus all at once.
- Installing a cap on Medicare-covered insulin of $35 per month. Insulin will not apply toward the yearly deductible.
- Extending financial help to those looking for healthcare coverage through the Marketplace through at least 2025.
Making an informed decision
Medicare’s Annual Election Period (AEP) is running now through December 7th. The licensed insurance agents at Aevo Insurance Services, a division of Brown & Brown Absence Services Group, are available to offer Medicare guidance and support during this critical decision-making period. Contact Aevo today to speak with an agent regarding your individual coverage needs.
Please note that as of 2021, The Advocator Group now conducts business as Brown & Brown Absence Services Group. While our name may have changed, our commitment to excellent service and helping our clients in as many ways as possible has not.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all your options.