Medicare Costs In 2023 Will Surprise You (Lower Costs)
Unfortunately, as you get older, you tend to need more medical attention. For people who are retired, a new year typically means reviewing your new Medicare coverage. This year, many people are in for a surprise where Medicare costs in 2023 are concerned.
The cost for some people is going up like it is with everything else right now. However, many Medicare recipients will see a decrease in their overall cost. While the numbers won’t largely change, it is always advisable to plan ahead for how the increase or decrease may impact your finances. So, let’s take a closer look.
What Impacts the Cost of Medicare?
There are several factors that go into how much your healthcare will cost you each year. For older individuals, it is even more important to make sure you budget for your needs. When it comes to the cost of Medicare in 2023, there are a few things that impact the amount coming out of your pocket.
How much you pay in premiums, co-pays, deductibles, or coinsurance will all depend on what kind of coverage you choose. Additionally, the frequency in which you have to use your insurance will impact the overall cost too. Other determining factors include:
- Income
- Additional insurance policies
That being said, let’s get to a breakdown of Medicare costs in 2023.
Medicare (Part A)
For individuals who qualify for Medicare Part A, there is no monthly premium as long as you worked long enough. This is because they paid Medicare taxes during their working years. If you don’t qualify for free Part A, you will pay up to $506 a month in premiums. That is up from 2022’s maximum premium of $499. It should also be noted that if you don’t buy Part A when you are eligible for Medicare you may have to pay a penalty. Here is a breakdown of the Part A Medicare costs in 2023.
Hospital Stays in 2023
- $1,600 deductible for hospital stays per benefit period (this is up from $1,556 in 2022)
- $0 for the first 60 days of each benefit period
- $400/day for days 61-90 of each benefit period (up from $389)
- $800 per “lifetime reserve day” after day 90 of each benefit period (up from $778)
Medicare also covers skilled nursing facility stays. In 2023, you will pay the following for a stay in a skilled nursing facility:
- $0 for the first 20 days in of each benefit period
- $200 per day for days 21–100 of each benefit period
- All costs for each day after day 100 of the benefit period
Part B Medicare Costs in 2023
Now, you’ve probably noted by now that many of the costs mentioned above have gone up. However, many people on Medicare carry Part B coverage rather than Part A. This is where the cost is coming down a bit. The standard Part B monthly premium in 2023 will be $164.90, which is down from $170.10 in 2022. Social Security will tell you exactly how much you will have to pay, but it will likely go down from last year, albeit a small amount. The deductible has also gone down for Medicare Part B – from $233 to $226 this year.
That being said, you will pay the standard premium if you are enrolling in Part B for the first time this year. You will also pay the standard if you:
- Don’t receive Social Security benefits
- You are directly billed for your Part B premiums
- You also have Medicaid (the state will pay the standard premium amount for you)
Income Considerations for Part B
As mentioned above, your income also plays a role in how much you will pay in premiums. If your adjusted gross income from 2021 is above a certain amount, you will have to pay the standard premium plus an income-based amount. Here is the breakdown from the Medicare website.
It should be noted that this is based on your gross income from two years ago. If your income has gone down since then, you can submit a form to get your premium payments changed. Anyone with questions about their Part B premium can call Social Security at 1-800-772-1213.
Medicare Advantage Plans (Part C)
Advantage plans have also come down in price in 2023. The average cost this year is estimated to be $18, down from $19.52 last year. Of course, any Part C coverage will be on top of your Part B premium. The maximum out-of-pocket costs for people holding an Advantage Plan will be $8,300 for in-network services this year. Anything out of network can cost up to $12,450 out of pocket.
Medicare Drug Coverage (Part D)
Part D coverage has several changes that may actually make a difference to people receiving Medicare. The premium for Part D will go down slightly from $32.08 to $31.50. For those who pay a deductible for Part D (not everyone does), the premium has gone up to $505 from $480 last year. Additionally, income adjustments are made for individuals paying a premium for Part D as well. See below from the Medicare website.
The Inflation Reduction Act Impacts Drug Costs For Seniors
Thanks to the Inflation Reduction Act, starting January 1, 2023, there is a $35 monthly cap on cost-sharing for insulin under Part D. The deductible will also not apply to any covered insulin product. Now, many older people won’t have to choose between buying groceries or getting their insulin.
On top of that, there is no longer any cost-sharing for inoculations, such as the flu shot and shingles vaccine.
Not much has changed, but hopefully what has changed will help you keep a little extra money in your pocket this year.
What do you think about Medicare costs in 2023? How will it impact you? Let us know in the comments!