Medicare beneficiaries will see their Part B premiums decrease in 2023, the first time in more than a decade that the tab will be lower than the year before, the Centers for Medicare and Medicaid Services announced Tuesday.
President Joe Biden is set to highlight the drop in premiums at an afternoon event in the Rose Garden on Tuesday, touting Democrats’ work to “protect and strengthen Medicare and lower health care costs for seniors,” a White House official said.
Biden will also go after Republican efforts “to put Medicare on the chopping block every five years and repeal the Inflation Reduction Act, increasing seniors’ prescription drug costs,” the official said, slamming congressional Republicans for “siding with big pharmaceutical manufacturers over seniors in their effort to take away Medicare’s power to negotiate lower prescription drug prices.” That message – targeted toward the key demographic of older voters – comes six weeks before the midterm elections.
The standard monthly premiums will be $164.90 in 2023, a decrease of $5.20 from 2022.
The reduction, which was signaled earlier this year by Health and Human Services Secretary Xavier Becerra, comes after a large spike in 2022 premiums. Medicare beneficiaries had to contend with a 14.5% increase in Part B premiums for 2022, which raised the monthly payments for those in the lowest income bracket to $170.10, up from $148.50 in 2021.
A key driver of the 2022 hike was a projected jump in spending due to a costly new drug for Alzheimer’s disease, Aduhelm. However, since then, Aduhelm’s manufacturer has cut the price and CMS limited coverage of the drug. The agency said it would factor the lower-than-forecast spending into the 2023 premium.
Also, spending was lower than projected on other Part B items and services, which resulted in much larger reserves in the Part B trust fund, allowing the agency to limit future premium increases.
The annual deductible for Medicare Part B beneficiaries will be $226 next year, a decrease of $7 from 2022.
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.
One of the benefits of the Inflation Reduction Act, which Congress passed in August, will also kick in next year for Medicare beneficiaries. Starting July 1, cost-sharing will be capped at $35 for a one-month supply of covered insulin. Also, people with Medicare who take insulin through a pump won’t have to pay a deductible. This benefit will be available to people with pumps supplied through the durable medical equipment benefit under Part B.
The Medicare Part B premiums comes as seniors are also expecting a larger-than-usual increase in their Social Security payments. The annual cost of living adjustment, which will be announced next month, is being fueled by high inflation.
For 2022, seniors received a 5.9% increase, the largest in decades, but it was quickly overrun by soaring price increases.
The Senior Citizens League projects that the 2023 increase could be 8.7%, which would bump up the average retiree benefit by $144.10 to $1,656.