Medicare B Premiums Are Decreasing in 2023

November 07, 2022

According to several reports discussing the future of benefits, Medicare premium B premiums are decreasing in 2023. Anybody who received Medicare benefits knows that premium pricing can feel like a rollercoaster. When Medicare Part B rolled out in 1965, premiums were just $3.00. In 2022, though, this figure has inflated to $170.10. The continuously rising cost has put a strain on many senior beneficiaries who rely on Part B. Unlike some other types of Medicare plans, Part B covers medical services, including primary care visits, hospital stays, and some types of medical equipment. Luckily, beneficiaries are finally catching a break as premiums may decrease in 2023.

Medicare B Premiums Are Decreasing and Many Might Save

Find out why and see how much beneficiaries will save.

Overestimation of Spending

There are many reasons why premiums are going down for Medicare Part B in 2023. It is the first time prices have decreased in over a decade, so it’s a welcome change after years of consistent increases. One of the biggest reasons for the change is an overestimation of spending. Likewise, the Centers for Medicare and Medicaid Services previously established a budget in 2022 based on inflated spending projections. Actual spending for the program did not reach projections, allowing for a decrease in premiums.

Cutting Back on Aduhelm

Medicare has cut back on funding the Alzheimer’s drug Aduleilm, contributing to lower-than-expected spending. It originally licensed Aduhelm in 2007, and the FDA approved it in 2021. Then, Medicare gave full coverage in 2022. Unfortunately, though, there was much controversy surrounding its approval and Medicare’s decision to cover the drug — especially since this coverage caused premiums to spike dramatically from $148.50 to $170.10 from 2021 to 2022. As Medicare cuts back on its investment in Aduhulm, premiums will decrease to $164.90 in 2023.

Increased Reserve in Part B

Because of the reduced spending and cutbacks on Aduhelm, CMS saw a more significant reserve in the Medicare B account than initially expected. The CMS gives discretion on how to use the reserve to fund new drug coverage, expand offerings to beneficiaries, or increase payouts to Medicare contractors. Luckily for beneficiaries, CMS chose to go a different route and simply cut the cost of premiums. Some beneficiaries might have preferred increased coverage, and business contractors could benefit from increased payment — but lowered premiums will ultimately help everybody.

Pass on Premium Increases

Finally, the reduction in Medicare supplement insurance premiums can simply be attributed to CMS’s decision to pass on a premium increase. In addition to the financial justification for this decision, Medicare officials have the incentive to avoid the backlash they faced in 2022. Many criticized the sharp increase in premiums. Likewise, many beneficiaries expressed concerns they could no longer afford coverage. With decreased premiums, Medicare beneficiaries must take better care of their health in 2023 and beyond.

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