Millions of older Americans rely on Medicare for health coverage. And that coverage can be more expensive than anticipated.
While Medicare Part A, which covers hospital care, is free for most enrollees, Part B, which covers outpatient services, comes at a cost. Specifically, enrollees pay a monthly premium for Part B -- either a standard premium or a standard premium plus a surcharge, depending on income.
Most years, the cost of Medicare Part B increases, leaving enrollees with higher premiums to bear. But for the first time in years, Medicare Part B premiums are actually decreasing. That means enrollees could get a nice break once the new year rolls around.
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What will Medicare Part B cost in 2023?
Right now, the standard Medicare Part B premium is $170.10 per month (though higher earners pay more due to the aforementioned surcharge). Next year, the standard monthly cost of Part B will drop to $164.90.
Meanwhile, Medicare Part B enrollees are subject to an annual deductible that can also change from year to year. This year, that deductible is $233. Next year, it's decreasing to $226. While that's only $7 in savings, combined with a lower Part B premium, it's nothing to scoff at.
Why are Medicare Part B costs dropping? A big reason is that 2022 premiums were hiked up to cover projected spending on certain medications whose costs came in lower than expected. Now, Medicare is passing that savings on to enrollees by cutting premium and deductible costs for 2023.
Seniors stand to benefit in a really big way
Not having to spend as much on Medicare Part B could really help seniors at a time when living costs are soaring due to inflation. But a drop in Part B costs could also be a boon to seniors who are enrolled in Social Security and Medicare at the same time.
Seniors in that boat have their Medicare Part B premiums deducted from their monthly Social Security benefits directly. And Part B hikes can eat away at Social Security raises. But since the cost of Medicare Part B isn't rising in 2023, seniors on Social Security should be able to keep their generous 8.7% cost-of-living adjustment in full.
Of course, Medicare enrollees shouldn't expect the cost of Part B to keep shrinking over time. But for now, they can enjoy the relief that will come with paying less for Part B in 2023.
To be clear, this isn't to say that Medicare enrollees won't end up spending more money on healthcare overall next year. Some might face increases under their respective Part D plans. And out-of-pocket costs for services under Part A are going up.
The standard inpatient hospital deductible, for example, is rising from $1,556 in 2022 to $1,600 in 2023. And the cost of daily coinsurance for an extended hospital stay is increasing from $389 to $400.
But when it comes to Part B, seniors are in for some nice savings -- and that's something to be thankful for.
