Inflation is 8.3%, medical costs are up 5.4%, the average hospital stay for Medicare patients is $13,600, and the most recent estimate is that people aged 65 will pay $315,000 for medical care during their retirement years.
So what’s the good news about retiree medical costs? For the first time in more than a decade, your Medicare Part B payments will decrease in 2023.
For help navigating Medicare Part B payments and how these payments will affect your overall financial situation, consider partnering with a financial advisor.
How big is Medicare Part B shrinking?
Even if gas, groceries and rent are too high, Part B beneficiaries will pay $5.20 less per month, for an annual premium savings of $62.40. Additionally, the Part B annual deductible will also decrease slightly, sliding from $7 to $226.
The rate cut was recently announced at a White House event by President Joe Biden.
“It’s a fee you pay for Medicare to cover your visits to your doctor,” Biden said. “For years, those fees have been rising. Now, for the first time in more than a decade, they’re going to come down. And for millions of elderly and disabled people on Medicare, that means more money in their pockets all getting the care they need.”
Part B is one of many aspects of Medicare, which is available to Americans age 65 and older. Part A covers inpatient care in hospitals, skilled nursing facility care, palliative care, and home health care. Part D covers certain prescription drug costs, including many vaccines and injections).
According to the Medicare.gov website, Medicare Part B covers:
• Services of physicians and other health care providers
• Ambulatory care
• Home care
• Durable medical equipment (such as wheelchairs, walkers, hospital beds and other equipment)
• Many preventive services (such as screenings, injections or vaccinations, and annual “wellness” visits
Further decreases in Medicare costs for 2023
Premiums are also expected to fall on Part D of Medicare drug coverage, with the average base monthly premium for standard Part D coverage expected to be $31.50, down from $32.08 in 2022.
When it comes to Part C — more commonly known as Medicare Advantage — seniors can expect additional savings in 2023, according to the Centers for Medicare & Medicaid Services. This part of Medicare involves purchasing approved coverage plans from private insurers as an alternative to Medicare that covers services offered under Part A, Part B, and generally Part D.
According to the centers, the projected 2023 premium for Medicare Advantage plans is expected to drop 8% from 2022 to $18 per month from $19.52. The lower premium for 2023 comes after an earlier 10% reduction in average premiums from 2021.
When does Medicare Open Enrollment open for 2023?
The annual open enrollment plan for Medicare runs from Dec. 7, when eligible seniors can sort through all 2023 coverage options on Medicare.gov. Seniors become eligible to enroll in Medicare three months before their 65th birthday, although people with disabilities, end-stage kidney disease, or ALS (Lou Gehrig’s disease) may be eligible to enroll earlier.
Amid runaway inflation and other economic challenges, there’s good news for retirees: Medicare Part B costs are falling for the first time in a decade.
You can prepare for your retirement on your own, but there are a lot of things to consider, especially considering that so many people have been caught off guard by these rising medical costs. You can also work with a financial advisor who can plan properly to address any concerns you have about your impending retirement. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your matching advisors for free to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.
If you’re trying to find the right balance in your retirement portfolio, consider using SmartAsset’s free asset allocation calculator to help you get the right mix that can help you achieve your financial goals.