Your Medicare premiums are likely to decline in 2023.
The average premium for a prescription drug policy under Part D of Medicare will decline by about 1.8%, to $31.50 from $32.08 in 2022, according to the Centers for Medicare and Medicaid Services (CMS).
But this is only the average premium.
There are dozens of Part D policies available in most areas of the country.
Insurers set the premiums and other terms within limits set by CMS. Since insurers set premiums based on their own experience and goals, your premium might not decline and might increase.
Review the statement of plan changes for 2023 that you should have received in the mail in September. (If you didn’t receive it, call the insurer or check its website.)
Also, review other changes in the policy.
Some insurers reduce premiums but at the same time increase copayments, coinsurance and deductibles.
An insurer also can change the classification of some medications.
For example, a medication that was in Tier 1 (the lowest-cost category) in 2022 might be in a higher tier in 2023.
When that happens, a policyholder who uses the medication pays more out of pocket than in the previous year.
The Centers for Medicare & Medicaid Services also announced that the base premium for Part B of Medicare will decline by $5.20 per month to $164.90 per month.
In addition, the annual deductible for Part B will decline by $7 to $226.
The lower Part B premium is a partial reversal of the substantial increase from 2021 to 2022. CMS increased the 2022 premium in part to cover potential costs of the new Alzheimer’s drug, Aduhelm.
Subsequently, CMS limited coverage of Aduhelm. The Centers declined to reduce the 2022 premium during the year but is reducing the premium for 2023.
Yet, in 2023, the premium does not return to the 2021 level.
CMS also released the inflation adjustments for the additional premiums that higher-income Medicare beneficiaries pay for Part B and Part D under the Medicare premium surtax, also known as IRMAA.
The maximum total premium in 2023 will be $560.50, imposed on modified adjusted gross incomes equal to or greater than $500,000 for individuals and $750,000 for married couples filing jointly.
Open Enrollment for Part D and other parts of Medicare is from Oct. 15 through Dec. 7.
Any changes you make during this period will take effect January 1, 2023. Be sure to review changes in your Part D policy (or your Medicare Advantage plan’s prescription drug benefits) soon.
If the changes will increase your out-of- pocket cost substantially or you aren’t happy with your policy, contact a local insurance agent and review alternatives in your local market.
Medicare supplement policies, also known as Medigap, are available from private insurers and can be purchased or changed any time during the year. Medicare doesn’t issue reports of changes in these premiums.
We’ll have updates on this in future issues of Retirement Watch Weekly. Meantime, you can learn more on Retirement Healthcare & Medicare on RetirementWatch.com.
P.S. I will be holding a subscribers-only teleconference at 1 p.m. EST on Nov. 29 regarding “The Coming Retirement Squeeze.” The event is free to my subscribers, but you have to register here in order to attend. Don’t miss out!