Medicare will soon be less expensive, despite the fact that prices for practically everything else are rising due to inflation. The Centers for Medicare & Medicaid Services, or CMS, has announced that the cost of Medicare Part B would decrease starting in 2023.
Most beneficiaries’ Medicare Part B monthly premiums will drop to $164.90 in 2023. (A limited number of higher-income clients pay greater premiums.) That represents a monthly drop of $5.20 from the $170.10 premium in 2022.
Additionally, in 2023, the Medicare Part B deductible will drop from $233 to $226.
The Part B payment is paid by both beneficiaries of Original Medicare (Parts A and B) and Medicare Advantage (Part C) members, so almost everyone with Medicare is affected by the premium reduction.
Why did prices drop for 2023?
The 2023 premium cuts come just one year after a significant price hike. The largest-ever price increase for Medicare Part B premiums occurred between 2021 and 2022, when premiums increased by $21.60.
Aduhelm, a very expensive Alzheimer’s disease treatment, is a key component in both the 2022 price hike and the 2023 price decrease.
Aduhelm’s possible Medicare coverage was mentioned by CMS in a November 2021 fact document as one of the factors contributing to the significant Part B price increase for 2022. CMS stated that “we must plan for the prospect of coverage for this high cost Alzheimer’s medicine which could, if covered, result in significantly greater expenditures for the Medicare programme” even though CMS had not yet decided whether Medicare would pay Aduhelm.
That scenario didn’t materialise. CMS declared in April 2022 that only selected clinical trials that have received government approval would qualify for Medicare coverage of Aduhelm. Since we can put cost savings “straight back into the pockets of people enrolling in Medicare in 2023,” said Department of Health and Human Services Secretary Xavier Becerra in May.
What this means for Medicare beneficiaries
According to a NerdWallet review of historical Medicare premium data, 2023 will be just the fourth year in a row that Medicare Part B premiums have decreased year over year. Since the last dip in 2012, more than ten years have elapsed.
A smaller percentage than earlier declines, the Medicare Part B premium for 2023 is around 3% less than it was for 2022.
However, after the cost-of-living adjustment in 2023, Social Security benefits will increase by almost 9%. Beneficiaries will have more money because Medicare Part B premiums—which are frequently withheld from Social Security benefits—would be reduced, leaving them free to pay other inflation-related expenses.
