Alexander Rosenberg
While inflation is driving up the prices of almost everything else, Medicare is about to get cheaper. According to an announcement from the Centers for Medicare & Medicaid Services (CMS) Tuesday, Medicare Part B premiums will decrease for 2023.
The monthly Medicare Part B premium will drop to $164.90 for most beneficiaries in 2023. (A few higher-income beneficiaries pay higher premiums). That’s down $5.20 per month from the $170.10 premium in 2022.
The Medicare Part B deductible also decreases from $233 in 2022 to $226 in 2023.
The premium reduction applies to almost all Medicare members because both Original Medicare beneficiaries (Part A and Part B) and Medicare Advantage (Part C) members pay the Part B premium.
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Why have prices fallen for 2023?
The lower premiums for 2023 come just a year after a sharp price hike. Premiums increased $21.60 from 2021 to 2022 — the largest price increase ever for Medicare Part B premiums.
A single drug is largely responsible for both the price increase in 2022 and the price decrease in 2023: Aduhelm, a very expensive treatment for Alzheimer’s disease.
In a November 2021 fact sheet, CMS cited potential Medicare coverage for Aduhelm as one reason for the large Part B price hike for 2022. Although CMS had not yet determined whether Medicare would cover Aduhelm, CMS said, “We need to plan for this possibility.” coverage for this expensive Alzheimer’s drug, which, if covered, could result in significantly higher Medicare spending.”
This possibility did not materialize. In April 2022, CMS announced that Medicare will only cover Aduhelm in connection with certain federally approved clinical trials. As a result, Health and Human Services Secretary Xavier Becerra announced in May that “we have found that we can put the cost savings directly into the pockets of people enrolled in Medicare in 2023.”
What this means for Medicare beneficiaries
According to a NerdWallet analysis of historical Medicare premium data, 2023 will see Medicare Part B premiums fall for only the fourth year from the previous year. More than a decade has passed since the last decline in 2012.
The Medicare Part B premium for 2023 is about 3% lower than 2022 — a lower percentage than previous cuts.
However, after the cost-of-living adjustment, Social Security payments could increase by almost 9% in 2023, according to an analysis by the Senior Citizens League, a nonprofit advocacy group. Medicare Part B premiums, which are often deducted from Social Security, won’t eat up that increase because they will be lower, leaving beneficiaries with more money to cover other costs that have increased as a result of inflation.
Medicare Part B 2023 Premiums Dip, Bucking Inflation Trends article originally appeared on NerdWallet.
