Millions of Medicare beneficiaries are set to save over $60 next year thanks to a decrease in monthly premiums.
Medicare Part B premiums for outpatient care and doctors’ checkups will drop by 3% for 2023, a change in direction after those premiums rose by 14.5% the prior year. For most people on Medicare, Part B premiums will be $164.90 per month next year, which is $5.20 cheaper than the current cost.
“For years, that fee has gone up. Now, for the first time in more than a decade, it’s going to go down,” President Joe Biden said during a speech about Medicare and inflation this week. “And [for] millions of seniors and people with disabilities on Medicare, that means more money in their pockets while still getting the care they need.”
Why are premiums dropping? It has to do with a Medicare change earlier in the year significantly limiting coverage of an expensive Alzheimer’s drug, Aduhelm. The premium hike in 2021 was driven by anticipation of higher costs for the government program to cover the new drug.
Medicare Part B is the outpatient care coverage in the government’s health insurance program for adults 65 and older as well as some younger people with disabilities or health conditions. For the roughly 60 million people on Medicare, Part B covers physician visits, outpatient hospital services and some home health services, among several other types of health care.
Savings for Medicare beneficiaries
Most older adults on Medicare have their Part B premiums deducted from their Social Security payments. According to the latest estimates, Social Security checks are expected to increase by about 8.7% in 2023 due to cost-of-living adjustments to address inflation, which has spiked in recent months due to high consumer demand, fallout from government spending and global supply challenges. The reduction in Part B premiums will help make those checks a little larger.
In addition to the decrease in monthly premiums, the annual deductible for Part B beneficiaries will decrease by $7 in 2023, the Centers for Medicare & Medicaid Services said in a Wednesday news release. That means folks will only have to pay $226 before Medicare kicks in.
The AARP, a nonprofit that focuses on Americans over 50, celebrated the news of the reduction in premiums and deductibles.
The “announcement of lower Part B premiums and deductibles is welcome news for seniors who are struggling with rising costs due to inflation,” Nancy LeaMond, AARP chief advocacy and engagement officer, said in a news release. “Reducing their Medicare expenses, combined with the expected cost-of-living adjustment for Social Security, will provide much-needed financial relief for older Americans.”
The open enrollment period for Medicare runs from Oct. 15 through Dec. 7.
Retire with Money
Retire With Money brings the latest retirement news, insights, and advice to your inbox. Elizabeth O’Brien has covered retirement for more than 10 years.