Here's What Medicare Insurance Costs in 2023

Curious Medicare insurance beneficiaries and their loved ones got some good news earlier than expected this year. On Tuesday, September 27, the Centers for Medicare & Medicaid Services (CMS) released the costs for Original Medicare in 2023. While the release of the costs typically comes in October or even November, a September announcement gives beneficiaries plenty of time to weigh their options ahead of the Medicare program’s Annual Enrollment Period (AEP), when they can freely change their plans to suit their evolving medical and financial needs.

The news comes before the anticipated release of the 2023 Social Security Cost-of-Living Adjustment (COLA), which we expect to be announced around October 13, 2022. Though CMS typically waits for the COLA announcement, as some Medicare insurance costs reflect the COLA, circumstances have allowed those to be non-factors this year.

That all sounds pretty exciting, right? Well, we won’t keep you in suspense anymore! Here are the official costs of Original Medicare for 2023.

All facts and figures can be found in the September 27, 2022, CMS press release “2023 Medicare Parts A & B Premiums and Deductibles 2023 Medicare Part D Income-Related Monthly Adjustment Amounts.”

Medicare Part A

For those requiring hospital and inpatient care in 2023, you won’t experience vastly higher costs than in 2022 for your Part A coverage. As with previous years, almost everyone enrolled in Medicare Part A will receive the benefit premium-free (about 99 percent). You can get Part A premium-free if you or your spouse paid the Medicare tax for 40 quarters (or 10 years). This is taken directly out of your paycheck, meaning most of us have already paid the tax before we’ve even realized.

If you haven’t paid the Medicare tax for 40 quarters, you may owe a monthly premium, though this differs based on how many quarters of tax you paid. You may either have to pay the full premium or a partial premium, which you have if you paid 30 or more quarters without reaching 40 quarters. For 2023, the full premium is $506, a $7 increase from 2022’s $499 Part A premium. The partial premium grew from $274 in 2022 to $278 for the upcoming year.

The premium isn’t the only cost associated with Medicare Part A. You also have a deductible and coinsurances with your coverage. In 2023, the inpatient hospital deductible will be $1,600, up $44 from $1,556 in 2022. There’s also a daily coinsurance for hospital stays between days 61 and 90. Each day of care will cost you $400 in 2023, an $11 increase from $389 in 2022. If your stay is longer than 90 days, you’ll begin using lifetime reserve days. The copays for these grew from $778 in 2022 to $800 in 2023. Finally, the skilled nursing facility coinsurance for days 21 to 100 increased $5.50 from $194.50 in 2022 to an even $200 in 2023.

2023 Part A Cost Breakdown

Medicare Part B

It’s with Medicare Part B that we have the most exciting news. For the first time in years, Medicare Part B will be experiencing a reduction in premium costs from the previous year. This is due, in part, to savings that CMS experienced, and wanted to pass on to consumers, through a major price drop in an expensive Alzheimer’s disease treatment and by finalizing coverage for that drug and similar FDA-approved drugs. The Medicare Part B premium is dropping from $170.10 in 2022 to $164.90 in 2023, a $5.20 savings each month. The annual Part B deductible is also seeing a decrease of $7 from $233 in 2022 to $226 in 2023.

Depending on how much you make, you may run into the Income-Related Monthly Adjustment Amount (IRMAA). This adjusts the Medicare Part B premium based on your income. Most seniors will pay the standard Part B premium, since the starting adjustment in 2023 ($97,000) is more than double the median senior income in the United States.

This year will also see the inclusion of a new cost for certain Medicare insurance beneficiaries who are at least 36 months post-kidney transplant. People in this situation used to lose Medicare insurance coverage of certain treatment drugs. Beginning in 2023, these beneficiaries may elect to continue their Part B coverage for certain immunosuppressive drugs, though this comes with an additional premium. In 2023, this additional premium will cost $97.10. This is also subject to an IRMAA.

2023 Part B Cost Breakdown

Medicare Advantage and Part D

For other types of Medicare insurance coverage, like Medicare Part C and D, there’s not as much news. This is because both are offered by private insurance companies (though plans are approved by CMS), meaning costs can differ from plan to plan. That said, CMS announced their projections for 2023 Part D costs earlier this year. They projected an average drop of around 1.8 percent for plan premiums, with a slight increase for average copays and deductibles.

Medicare Part D also has a premium IRMAA similar to Part B. This adjustment is paid on top of the specific plan’s premium, so we can only give you the adjustment.

On September 29, 2022, CMS released their projected average premiums for Medicare Advantage plans in 2023. For 2023, CMS revealed that the projected average of Part C plan premiums will drop 8 percent from 2022, from $19.52 to an even $18. They also announced that internal data projects Medicare Advantage enrollments to climb to 31.8 million beneficiaries. This breaks the previous record number of beneficiaries, 29.5 million.

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While we can expect expenses to go up in line with the cost of living each year, CMS’ announcements for Original Medicare’s costs have bucked the trend of the last few years. Where there isn’t an outright decrease in costs, there have been only moderate increases. Considering that we may see another historically large COLA, it may mean more money in beneficiaries’ pockets and less that they need to spend for the medical care that they need and deserve. Knowing these costs, you have the tools to make a more informed decision during AEP and beyond.