Navigating the shifting landscape of Medicare is a challenge, but understanding recent changes is essential for the millions of Medicare beneficiaries.
Surprisingly, many of the Medicare’s costs for 2023 decreased compared to 2022. This was due to a significant contingency increase in 2022 due to a new Alzheimer’s drug.
Read on to discover the exact Medicare costs for 2023.
Costs for Medicare Part A (Hospital Insurance)
Most people do not pay a monthly premium for Medicare Part A if they, or their spouse, worked at least 40 quarters (10 years). The monthly premium increased slightly for those who have to purchase Part A. The Part A hospital inpatient deductible and daily copayments also increased slightly.
(1) Premium
| Work History | 2022 | 2023 |
|---|---|---|
| Worked 40 or more quarters | $0 | $0 |
| Worked 30-39 quarters | $274 | $278 |
| Worked less than 30 quarters | $499 | $506 |
For those individuals who must purchase Medicare Part A, the monthly premium increased be either $4 or $7 per month.
(2) Deductible
| 2022 | 2023 | |
|---|---|---|
| Deductible Per Benefit Period | $1,556 | $1,600 |
The Medicare Part A deductible increased from $1,556 in 2022 to $1,600 in 2023. This deductible applies to each benefit period, which typically begins when a beneficiary is admitted to the hospital or skilled nursing facility and ends after 60 consecutive days without receiving inpatient care.
(3) Copayment – Hospital Inpatient
| 2022 | 2023 | |
|---|---|---|
| Daily copay for days 1-60 | $0 | $0 |
| Daily copay for days 61-90 | $389 | $400 |
| Daily copay for days 91+ | $778 | $800 |
| Costs beyond lifetime reserve days | All Costs | All Costs |
In 2023, Medicare beneficiaries are responsible for a daily copayment of $400 for days 61-90 of a hospital stay. For lifetime reserve days (days 91 and beyond), the daily copayment rose to $800 in 2023. Beneficiaries remain liable for all costs beyond their lifetime reserve days.
(4) Copayment – Skilled Nursing Facility
| 2022 | 2023 | |
|---|---|---|
| Daily copay for days 1-20 | $0 | $0 |
| Daily copay for days 21-100 | $194.50 | $200 |
| Daily copay for days 100+ | All Costs | All Costs |
For days 21-100 of skilled nursing facility care, the daily copayment increased from $194.50 in 2022 to $200.00 in 2023.
Costs for Medicare Part B (Medical Insurance)
(1) Premium
| File individual tax return | File joint tax return | File married & separate tax return | 2022 | 2023 |
|---|---|---|---|---|
| Less than or equal to $97,000 | Less than or equal to $194,000 | Less than or equal to $97,000 | $170.10 | $164.90 |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | Not applicable | $238.10 | $230.80 |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | Not applicable | $340.20 | $329.70 |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | Not applicable | $442.30 | $428.60 |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | Greater than $97,000 and less than $403,000 | $544.30 | $527.50 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | Greater than or equal to $403,000 | $578.30 | $560.50 |
The standard monthly premium for Medicare Part B decreased from $170.10 per month to $164.90 per month. However, Medicare charges a Part B premium surcharge for high-income earners known as the Income Related Monthly Adjusted Amount (“IRMAA”). The IRMAA surcharge also decreased in 2023.
(2) Deductible
| 2022 | 2023 | |
|---|---|---|
| Annual Deductible | $233 | $226 |
The annual Medicare Part B deductible decreased from $233 in 2022 to $226 in 2023.
(3) Coinsurance
After meeting the deductible, Medicare beneficiaries typically pay 20% of the Medicare-approved amount for most Part B services. This amount has not changed.
Costs for Medicare Part D (Prescription Drug Coverage)
(1) Premium
The monthly premiums for Medicare Part D vary depending on the plan the individual chooses. The average monthly premium in 2023 is projected to be $31.50. This would be a slight decrease from the 2022 average monthly premium of $33.
Like Medicare Part B, there is an IRMAA surcharge for high-income earners. The IRMAA surcharge decreased very slightly in 2023.
| File individual tax return | File joint tax return | File married & separate tax return | 2022 | 2023 |
|---|---|---|---|---|
| Less than or equal to $97,000 | Less than or equal to $194,000 | Less than or equal to $97,000 | plan premium | plan premium |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | Not applicable | $12.40 + plan premium | $12.20 + plan premium |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | Not applicable | $32.10 + plan premium | $31.50 + plan premium |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | Not applicable | $51.70 + plan premium | $50.70 + plan premium |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | Greater than $97,000 and less than $403,000 | $71.30 + plan premium | $70.00 + plan premium |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | Greater than or equal to $403,000 | $77.90 + plan premium | $76.40 + plan premium |
(2) Deductible
The maximum allowable deductible for standard Part D plans increased from $480 in 2022 to $505 in 2023. However, many plans do not charge the maximum allowable deductible.
(3) Coverage Gap (Donut Hole)
In 2023, beneficiaries enter the coverage gap once their total drug costs reach $4,660, compared to $4,430 in 2022. While in the coverage gap, beneficiaries receive a discount on prescription drugs. Beneficiaries will exit the coverage gap after reaching $7,400 in out-of-pocket costs for covered drugs. This amount is up from $7,050 in 2022.
Final Thoughts
The changes in Medicare costs from 2022 to 2023 reflect adjustments in the healthcare landscape and Medicare’s commitment to providing accessible and affordable care for its beneficiaries. While the cost increases may be a cause for concern for some individuals, it is essential to remember that Medicare remains a vital source of health coverage for millions of Americans. Staying informed about these changes and understanding their implications can help beneficiaries make informed decisions about their healthcare.