While inflation is pushing up prices for almost everything else, Medicare is about to be less expensive. Medicare Part B premiums will go down for 2023, according to an announcement Sept. 27 by the Centers for Medicare & Medicaid Services, or CMS.
The monthly premium for Medicare Part B will fall to $164.90 in 2023 for most beneficiaries. (A small number of beneficiaries with higher incomes pay higher premiums). That’s a decrease of $5.20 a month from the $170.10 premium in 2022.
The Medicare Part B deductible is going down, too, from $233 in 2022 to $226 in 2023.
Why did prices drop for 2023?
The lower premiums for 2023 come just one year after a major price increase. Premiums went up by $21.60 from 2021 to 2022 — the largest-ever price increase for Medicare Part B premiums.
A single drug is a major factor in both the 2022 price increase and the 2023 price drop: Aduhelm, a very costly 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 increase for 2022. Even though CMS hadn’t yet determined whether Medicare would cover Aduhelm, CMS said that “we must plan for the possibility of coverage for this high cost Alzheimer’s drug which could, if covered, result in significantly higher expenditures for the Medicare program.”
That possibility didn’t come to pass. In April 2022, CMS announced that Medicare would cover Aduhelm only in the context of certain government-approved clinical trials. As a result, Department of Health and Human Services Secretary Xavier Becerra announced in May that “we have determined that we can put cost-savings directly back into the pockets of people enrolled in Medicare in 2023.”
What this means for Medicare beneficiaries
2023 will be only the fourth time Medicare Part B premiums have gone down year over year, according to a NerdWallet analysis of historical Medicare premium data. More than a decade has passed since the last decrease in 2012.
The Medicare Part B premium for 2023 is about 3% lower than 2022 — a smaller percentage than past decreases.
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However, Social Security payments might grow by nearly 9% following the 2023 cost-of-living adjustment, according to 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 any of that increase because they will be lower, leaving beneficiaries with more money to cover other costs that have risen as a result of inflation.
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Alex Rosenberg writes for NerdWallet. Email: [email protected] Twitter: @AlexPRosenberg.