Medicare costs will drop for millions of Americans next year

WASHINGTON — For the first time in a decade, Americans will pay lower monthly premiums next year for Medicare Part B, which covers routine doctor visits and other outpatient care.

A rare 3% decrease in monthly insurance premiums will likely be combined with a historically high cost-of-living increase in Social Security benefits – perhaps 9% or 10% – putting hundreds of dollars directly into the pockets of millions of people.

“This is something we may never see again in the rest of our lives,” said Mary Johnson, a social security and health care analyst for the Senior Citizens League. “It can really be used to pay off credit cards, to replenish pantries that are depleted because people can’t afford to buy as much today as they did a year ago, and to do some long-delayed home and car repairs.”

The cut in Medicare monthly premiums in 2023 comes after millions of beneficiaries endured a difficult year of high inflation and a sharp increase in premiums this year. Most people on Medicare will pay $164.90 a month for Part B coverage starting next year, a savings of $5.20.

Downsizing helps compensate last year’s spike of $21.60, which was driven in large part by the new Alzheimer’s drug Aduhelm, which is given intravenously in doctors’ offices and was introduced to the market last year at a price of $56,000. Earlier this year, Medicare set strict limits on the drug’s use and a drug maker ever since cut the cost of the medicine in half.

Medicare paid less than expected for the drug this year, helping to shore up reserves that allowed the agency to set lower Part B premiums for 2023, the Centers for Medicaid and Medicare said in a statement Tuesday. Spending on other Medicare goods and services was also lower than expected. The annual Part B deductible will also drop by $7 to $226.

President Joe Biden praised the reduction in Medicare premiums during a speech in the Rose Garden on Tuesday.

As the midterm elections approach and the Biden administration tries to contain the painful side effects of inflation, the White House has increasingly trumpeted its work to reduce health care costs.

“(For) the millions of seniors and people with disabilities who use Medicare, this means more money in their pockets getting the care they need,” Biden said.

Biden noted that starting next year, some Medicare recipients are expecting more savings thanks to the Inflation Reduction Act, which would require Medicare to cover the cost of recommended vaccines for older Americans and cap monthly insulin copayments at $35 a month. Other provisions of the law, including a rule that allows Medicare to negotiate directly with drug companies on the price of certain drugswill take several years to work.

The bill has not received support from Republicans in Congress, and the White House has often pushed it in speeches and on social media in recent weeks.

Republicans have a different view on this topic.

“There is despair in the White House,” the Republican National Committee said in response to Biden’s speech on Tuesday. “Voters have a clear choice in the midterms, knowing that Biden and the Democrats have skyrocketed food prices, created a recession and raised taxes.”

The Medicare premium cuts were announced as 66 million Americans await the announcement of Social Security cost-of-living increases next year for 2023. Analysts believe this could become historic, at around 9% to 10%. The exact amount will be announced next month.