Updated 25 Jan 2024 
5 Minute Read 
Medicare rates and plans change yearly. This content is purely for informational purposes so you can prepare for next year and plan out which coverage is best for you.
There are many telltale hints regarding how much Medicare will cost in 2023. From CMS: “The Centers for Medicare & Medicaid Services (CMS) today announced that the average basic monthly premium for standard Medicare Part D coverage is projected to be approximately $31.50 in 2023. This expected amount is a decrease of 1.8% from $32.08 in 2022.”
Medicare Quote
Where Do Medicare Surcharges Come From?
Medicare taxes are based on the last available tax return. So 2021 premiums are based on 2019 returns, and 2023 Medicare surcharges will be based on the 2021 federal tax returns.
How Many Income Tiers Determine Medicare Surcharges in 2023?
Initially, five income tiers decided premium increases for Medicare. However, it’s important to note that these tiers, imposed in 2011, were not indexed for inflation.
As it stands, Medicare recipients spend an average of $170.10 per month for Part B premiums, but the IRMAA surcharge is added to your 2022 premiums if your 2020 income was over $91,000 (or $182,000 if you’re married). In addition, these high-income beneficiaries also have to pay an additional monthly cost for their drug plan on top of their monthly Part D premiums, which were about $32.08 in 2022. The Centers for Medicare & Medicaid Services (CMS) announced that the average basic monthly premium for standard Medicare Part D coverage is projected to be approximately $31.50 in 2023.
So it seems like it’s more important than ever to have the right Medigap plans for your needs!
Senior Health Care
According to the yearly Retirement Income Strategies and Expectations survey released by Franklin Templeton, Health issues are the No. 1 retirement-related concern for adults over 65 (36%). What’s worse is that financing those health insurance costs throughout those golden years is the top expense concern amongst American adults, regardless of age (41%). Investing in Medicare Supplement Plans that are right for you can relieve some of this stress.
How much did Medicare Part A Cost in 2022?
Part A covers services like skilled nursing care or inpatient hospitalization. Research Data Assistance Center reported that only 1% of beneficiaries pay any monthly premium under a Medicare Part A health insurance plan. This is because you have 40 quarters or longer of paycheck-paid deductibles throughout your working life. This essentially goes into your Medicare cost pre-paying for future health needs.
The FICA (Federal Income Contributions Act) requires a deduction of your income each month of 1.45%. Your employer matches this amount for a total amount of 2.9%. If you are self-employed, you will have to pay this full amount of 2.9%. You would not have to pay for the Medicare Part A health insurance if you or a spouse had faithfully paid into Medicare for the amount of time required. Cost-sharing will be required for things like hospital deductibles but should be minimal.
With a Medicare Supplemental Health Insurance Plan, your medical cost will be lesser. You can still purchase Medicare Part A even if neither you nor your spouse had paid Medicare taxes for the ten years required. The amount you need to pay can depend on how many years you have contributed to Medicare.
How much did Medicare Part B Cost?
Part B premiums Medicare costs are covered each month. The amount is automatically deducted from Social Security or if you get Railroad Retirement Board benefit payments. If you don’t have benefit payments, you will receive a bill. While most people pay standard amounts, those with Modified Adjusted Gross Incomes above a specific amount may pay an income-related monthly adjustment amount known as the IRMAA. Medicare uses the most recent IRS information to determine your IRMAA.
The Part B standard premium amount in 2022 was $170.10. If you earn more, it could be higher. However, most people receiving Social Security benefits will end up paying a lesser amount. This is because the premium increased to an amount greater than the cost of living increase for the year.
The Medicare Part B deductible amount in 2022 was $233 for all Medicare beneficiaries. After this, you pay 20% for all Medicare-approved amounts for any healthcare services provided.
Medicare Quote
