Medicare Part B Premiums to Drop 3% Next Year

The government has finally announced the new standard monthly premiums for Medicare Part B. And after all the speculation about rate hikes, rates will actually be decreasing a little bit next year. Not only that, but the annual deductible for Medicare Part B will also be lower next year. With many Medicare beneficiaries struggling with increased healthcare costs, this decrease in rates should be helpful. So what will you be paying for Medicare Part B in 2023?piggy bank on a calendar with money sticking out of it and article title written across

Medicare Part B Premium

The new standard monthly premium for Part B will be $164.90 next year, which is about 3% lower than it is this year.  

2022 saw a large increase in Medicare Part B premiums because of projected spending on Aduhelm, a new drug for treating Alzheimer’s disease. Now that spending on the drug, and other treatments and services, has gone down, Part B once again has more financial reserves. This is allowing Medicare to lower next year’s premiums for Medicare beneficiaries.

Medicare Deductiblesblack envelope filled with money

Medicare Part B premiums are not the only costs that are going down. The annual deductible for Part B will be $226 for 2023, which is a $7 decrease from $233 in 2022.

But while the Medicare Part B deductible is going down, the deductible for Medicare Part A will go up $44 from this year’s $1556, making it $1,600 in 2023. For the 61st through 90th day of hospitalization, coinsurance will be $400 per day, up from $389 this year. For lifetime reserve days, the charge will be $800 per day (up from $778 in 2022).

IRMAA Changes

Income-related adjustment amounts, or IRMAAs, will kick in for single beneficiaries at the modified adjusted gross income amount of more than $97,000, up from $91,000 this year. For married beneficiaries filing a joint tax return, the extra monthly charge will apply if income is above $194,000, up from $182,000 this year.

Want To Save More?

If you need help paying for the things that Medicare doesn’t cover, you have the option of purchasing a Medicare Supplement Plan. Your plan can help pay for the things that Medicare does not, including the 20% coinsurance that you will have to pay out-of-pocket for every Part B expense. One of these plans could cover 100% of your Part A coinsurance and hospital costs, as well as 100% of Part B coinsurance and copayments, for one low monthly premium price. 

 

There are 10 different Medicare Supplement Plans to choose from, each offering different coverage options and rates. It’s worth looking into a Medicare Supplement Plan to save as much money as you can, so speak to an EZ agent for all of your options. EZ’s agents work with the top-rated insurance companies in the nation and can compare plans in minutes for you at no cost. To get free instant quotes for plans that cover your current doctors, simply enter your zip code in the bar on the side, or to speak to a licensed agent, call 888-753-7207.

How Your 2021 Tax Return Will Affect Your Future Medicare Premiums

Tax season is almost over, so as you’re getting everything squared away, you might also want to think about how your taxes will affect your Medicare premiums in the coming years. In fact, you should know that how you file your taxes this year can determine your premiums for 2023 and beyond, and if you’re married or upper-income, you might be in for some surprises. Find out exactly how your taxes this year will affect your future Medicare premiums.

Medicare Part B Premiumsillustration of green dollar bills

When it comes to Medicare premiums, most individuals will pay the base Part B premium of $170.10 per covered person. Higher-income individuals, though, will not only pay the Part B premium, but will also pay a surcharge, or an income related monthly adjustment amount (IRMAA) on top of it. 

How is this IRMAA determined? Your monthly premium depends on your modified adjusted gross income (MAGI) as reported on your 1040 form from two years ago. Your MAGI is your household’s adjusted gross income after any tax-exempt interest income and after factoring in certain tax deductions. So, that means your 2023 premiums will depend on the 2021 MAGI you reported on the 1040 form that you filed in 2021.

For 2022, an IRMAA will apply if you:

  • Filed individually in 2020, and reported modified adjusted gross income (MAGI) for that year in excess of $91,000.
  • Filed jointly for 2020 and reported MAGI for that year in excess of $182,000.

Deducting Medicare Premiumsillustration of a hand looking at paperwork with a magnifying glass

If you’re paying a lot for your Medicare premiums, the good news is that you can write them off, as well as any other qualifying health care expenses from the year. In order to do this, you will have to itemize your deductions, and you can only include out-of-pocket medical expenses that exceed 7.5% of your adjusted gross income (AGI).

In addition, if you are self-employed, you can deduct your premiums on Schedule 1 of your 1040 form as an “above the line” deduction, which will lower your AGI. The IRS considers you to be self-employed if you own a business as either a sole proprietor (Schedule C), partner (Schedule E), limited liability company (LLC) member, or S corporation shareholder with at least 2% of company stock.

So remember: what you do with your 2021 1040 form can impact your 2023 Medicare premiums. If you do have a higher income, and are worried about what your premiums will look like in the next few years, try to itemize to get some money back, so you can hopefully offset some of your medical expenses.

Medicare to Consider Lowering Part B Premiums

A few weeks ago, Medicare announced the new Part B premiums for 2022. While the Centers for Medicare and Medicaid Services (CMS) had projected a rise in premiums of 6.7% earlier in 2021, the actual increase in Part B premiums for 2022 is 14.5%, the largest increase ever seen. The huge increase is partly based on the potential cost of covering Aduhelm, a new drug to treat Alzheimer’s disease.

This massive increase will take premiums for beneficiaries in the lowest income bracket from $148.50 a month to $170.10 a month, which could be difficult for many Medicare beneficiaries living on a fixed income to afford. But now there is a chance that Medicare Part B premiums might be reduced.

The Reason For The $21.60 Hike

white round pills on a table coming out from a purple bottle
Medicare Part B premiums were hiked up to cover the new Alzheimer’s drug that has been approved by the FDA.

By law, CMS is required to set each year’s Part B premium at 25% of the estimated costs that will be incurred by that part of the program. One of the main reasons CMS gave for the large spike in Medicare Part B premiums for 2022 was that it needed to set aside money to cover Adulhem, the new Alzheimer’s drug that has recently been approved by the FDA. It was estimated that the drug would cost $56,000 a year. 

Now the medication’s manufacturer, Biogen, has estimated that the drug will actually cost $28,200 a year. Because of this projected change in price, the Department of Health and Human Services is asking for a re-assessment of Medicare Part B premiums.

The Push To Reduce Premiums

Department of Health and Human Services Secretary Xavier Becerra has ordered the Centers for Medicare & Medicaid Services to reassess this year’s standard premium. “With the 50% price drop of Aduhelm on Jan. 1, there is a compelling basis for CMS to reexamine the previous recommendation,” Becerra said.

Other organizations are also calling for a reduction in Part B premiums. “It is unconscionable for a single outrageously priced drug to drive up premiums for all Medicare beneficiaries – many of whom are already struggling to make ends meet,” said Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer. “Now that the drugmaker has cut the price in half, the Medicare Part B premium increase should be lowered as well.

“This also highlights the importance of giving Medicare the authority to negotiate drug prices. Without it, we’ll keep seeing sky-high drug prices leading to premium hikes and higher out-of-pocket expenses for older Americans.”

A CMS spokesperson said the agency is “reviewing the secretary’s statement to determine next steps.”

money bills in a black envelope
You can save hundreds of dollars with a Medicare Supplement Plan.

Save Money

If you are like one of the millions of Medicare beneficiaries who are living on a fixed income,  saving as much money as possible is a top priority. The best way to save money on healthcare is to find an affordable Medicare Supplement Plan – and the best way to do that? Speak to an EZ agent! We work with the top-rated insurance companies in the nation and can help find a plan that will save you money this year –  maybe even hundreds of dollars. Let our agents take the stress off you by comparing plans and finding ways to help you save money. And because we want to help you save as much money as possible, our services are completely free- no obligation or hassle. To get free instant quotes for plans that cover your current doctors, simply enter your zip code in the bar on the side, or to speak to a licensed agent, call 888-753-7207.

Preparing For Medicare Open Enrollment: 2021 Medicare Costs

The Centers for Medicare & Medicaid Services (CMS) has finally released Medicare costs for 2021. Knowing these costs will help you decide whether to stick with Original Medicare or buy a Medicare Supplement Plan to help pay for your Part B premiums and costs. Medicare Open Enrollment is still going on, but not for long! It will be over December 7, so read on to find out how you can be better prepared for next year.

Medicare Part A Premiums/Deductibles

money bills spread out on a table with a stethoscope on top of it.
Medicare Part A (hospital insurance) deductible has one up $76 dollars.

Medicare Part A is hospital insurance, and covers things like skilled nursing facilities, inpatient hospital stays, and some home healthcare services. If you are 65 or older and you or your spouse worked and paid Medicare taxes for at least 10 years, then you will be eligible for premium-free Part A.

The Medicare Part A inpatient deductible that you must pay when admitted to the hospital will be $1,484 for each benefit period in 2021, which is an increase of $76 from $1,408 in 2020. The breakdown for 2021 is:

  • Days 1-60- $0 coinsurance for each benefit period
  • Days 61-90– $371 coinsurance per day of each benefit period
  • Days 91 and beyond- $742 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime)
  • Beyond lifetime reserve days- you pay all costs

Medicare Part B Premiums/Deductibles

Medicare Part B is medical insurance and covers such things as doctor visits, outpatient hospital services, durable medical equipment (DME), and certain home health services. The government had indicated that  Medicare Part B premiums would not increase by more than  25% in 2021.  CMS’ announcement has now given us the exact amount they will increase by: Medicare Part B premiums for 2021 will be $148.50, which is an increase of $3.90 from $144.60 in 2020. Your premium amount may be higher depending on your income:

chart with different income ranges and monthly part b premiums.

CMS also announced that the annual deductible for Medicare Part B will be $203 in 2021, which is an increase of $5 from $198 in 2020. You will continue to  pay 20% of the Medicare-approved amount for most doctor services, outpatient therapy, and durable medical equipment after this $203 deductible is met. 

Considering A Medicare Supplement Plan

Although the costs are not going up by too much next year, for some who are on a fixed income or a tight budget, an almost $4 a month rise in premiums can be a lot. On top of that, the 20% coinsurance you will have to pay could increase with the rising costs of healthcare. Luckily there are ways to help pay for coinsurance and save money. 

Medicare Supplement Plans are perfect for beneficiaries looking to save money and have more of their medical care covered. There are 10 different Medicare Supplement Plans to choose from, each with different price points and coverage options. If you are interested in looking into these plans but do not know where to start, allow an EZ.Insure agent to help. Our licensed agents work with the top-rated insurance companies in the country and can compare plans in your area in minutes. We will assign you one and only one agent who will go over your budget and medical needs. They will compare Medicare Supplement Plans to find the one that is best for your needs. What’s even better is that all of our services are free! To get instant free quotes, simply enter your zip code in the bar above, or to speak directly to an agent, call 888-753-7207.

Preparing For Medicare Open Enrollment: Medicare’s 2021 Part B Premium Capped By Congress

Amid uncertainties about Medicare prices for 2021, Congress has taken action to provide some  relief next year for the 64 million Medicare beneficiaries in the United States. On Wednesday, September 30th, a short-term government funding bill was passed by the Senate and signed by President Trump that will cap Medicare Part B premiums for 2021. There has been no official announcement indicating how much premiums will be next year, but thanks to the bill, any increase will be capped at 25% of what it otherwise would have been.

picture of congress building
A short-term government funding bill was passed by the Senate will cap Medicare Part B premiums for 2021.

No Real Numbers Yet

Medicare Part B premiums rose nearly 7% in 2020, which had Medicare trustees predicting back in April of this year that the standard 2021 Part B premium would be $153.20, a 6% increase. However, due to the pandemic, there has been uncertainty surrounding Medicare prices for next year. The impacts of COVID-19 might be a major factor in determining how much premiums will increase.

“One thing that’s really hard about this year is that there’s been increased costs from treating Covid, but decreased cost from people delaying care or avoiding being in hospitals or doctors offices,” said Casey Schwarz, senior counsel for education and federal policy at the Medicare Rights Center.

Social Security COLA Role

social security card under some money bills and coins
Social Security COLA is expected to be 1.3%, but this might not be enough.

It is also unclear whether Social Security’s associated annual cost of living adjustment, or COLA, will be enough to cover next year’s increase in Medicare premiums. The COLA, which is provided to seniors to help with the costs of necessities like Medicare premiums, is estimated to increase 1.3%  next year, meaning the average monthly benefits will increase from $1,053  to a little over $1,522. 

A discrepancy between the increase in Part B premiums and the increase in the COLA wouldn’t necessarily be a major problem for Social Security recipients. If Part B premiums increase is more than the COLA, then Medicare beneficiaries who are collecting Social Security are “held harmless.” This means that they can see a premium increase but it can’t be larger than their COLA dollar-amount increase. Unfortunately, Medicare beneficiaries who are not collecting Social Security benefits absorb the extra costs, which means they could see a sharp rise in premiums.

“What seems to be motivating Congress is the fear that there will be an unexpected spike in premiums, or one that’s out of step with normal premium increases across the board, or specifically for those not held harmless,” Schwarz said.

The Cap

sign of a red hand in a red triangles
Congress put a cap on Part B premiums so that it is guaranteed to not exceed a 25% rise.

While we would normally have a good idea by now of how much premiums are going to be for the following year, the pandemic is putting everything on hold. Only 25% of Part B is funded through premiums; the other 75% is funded through money from the federal government’s general revenue – this year, the government took a “loss” by providing millions of Americans, hospitals and businesses with financial relief, and so that loss may be passed on to Medicare beneficiaries.

Even if Congress has capped the premiums and will not allow them to increase by more than 25% of what they would have increased by, that percentage could still mean a large jump in premium prices. Many Medicare beneficiaries could still end up struggling to keep up with costs. Premium prices are expected to be revealed in early November. 

If you need help planning for next year, consider getting help from an EZ.Insure agent. Our licensed agents will help you prepare financially for next year, and review all Medicare options in your area. To get free advice and quotes on plans, enter your zip code in the bar above, or to speak directly to one of our agents, call 888-753-7207.