The Center for Medicare & Medicaid Services (CMS) have announced the premiums, deductibles and coinsurance amounts for Medicare Parts A & B for the year 2023.
Let’s Begin with Part A
Medicare Part A covers inpatient hospital, skilled nursing facility, hospice, inpatient rehabilitation, and some home health care services. The Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital will be $1,600 in 2023, an increase of $44 from $1,556 in 2022. See the chart below for Cost Sharing in Medicare Part A.
| 2022 | 2023 |
Inpatient Hospital Deductible | $1,556 | $1,600 |
Daily Coinsurance for first 60 days | $0 | $0 |
Daily Coinsurance for Days 61-90 | $389 | $400 |
Daily Coinsurance for lifetime reserve days | $778 | $800 |
Skilled Nursing Facility first 20 days | $0 | $0 |
Skilled Nursing Facility Days 21-100 | $194.50 | $200 |
Part B
Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. Each year the Medicare Part B premium, deductible, and coinsurance rates are determined according to the Social Security Act. The annual deductible for all Medicare Part B beneficiaries is $226 in 2023, a decrease of $7 from the annual deductible of $233 in 2022. The standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 from $170.10 in 2022. The Medicare Part B monthly premiums begin at $164.90 and be as high as $560.50. The reason there is a range of premiums is because since 2007, a beneficiaries Part B premium is based off their income. Medicare looks back two years ago at your tax return and looks at your modified adjusted gross income. If your income is above the standard earnings they impose an Income-Related Monthly Adjustment Amount (IRMAA) charge. The chart below illustrates the various monthly Part B premium charges.
The income amounts shown are Modified Adjusted Gross Income from your tax forms of 2021.
Individuals | Beneficiaries filing Jointly | (IRMAA) | Total Monthly |
< $97,000 | <$194,000 | $0.00 | $164.90 |
>$97,000 to $123,000 | >$194,000-$246,000 | $65.90 | $230.80 |
>$123,000-$153,000 | >$246,000-$306,000 | $164.80 | $329.70 |
>$153,000-$183,000 | >$306,000-$366,000 | $263.70 | $428.60 |
>$183,000-$500,000 | >$366,000-$750,000 | $362.60 | $527.50 |
>$500,000 | >$750,000 | $395.60 | $560.50 |
You may ask yourself, wait…they’re lowering their charges? Yes, you are reading that correctly. What happened was in 2022 Medicare had a contingency program in place to cover the projected costs of a new Alzheimer’s drug, Aduhelm. As 2022 wraps up, the actuality is that the spending was lower than their projections which created much larger reserves in the Part B account of the Supplementary Medical Insurance (SMI) Trust Fund. CMS is passing said excess on to the beneficiaries of Medicare Part B coverage. Hence, your costs were lowered.