Medicare Costs in 2023

Key Points


How much does Medicare cost? Do you have to pay for Medicare? Is Medicare Part B free? What will be my Medicare premiums in 2023?

These are very common questions about the costs for Medicare. The costs for Medicare Part B and
Part D, as well as supplemental coverage, are something that many don’t anticipate. It can surprise you when you turn 65 and learn that Medicare is not free.

So, do you have to pay for Medicare? Yes, most people do pay Medicare premiums. Fortunately, it’s fairly easy to put together a Medicare cost estimate so that you can plan ahead.

Watch 2023 Costs of Medicare Video For all Parts of Medicare

Part A Costs 2023

The cost for Medicare Part A for most people is usually zero. If you’ve worked 10+years (40 quarters) in the U.S., you have already paid for Part A via payroll taxes. (99% of beneficiaries qualify for free Part A.) If you have to buy Part A, the cost for Medicare Part A will be around $506/month. People with less than 40 quarters work experience but more than 30 quarters can get a pro-rated premium of $278/month. To be eligible to buy Part A, you must have been a legal resident or have had a green card for at least 5 years. Should you have a hospital stay, your Part A Deductible will be $1,600 in 2023. This is an increase of $44 from the Part A deductible in 2022, which was $1,556. (However, if you have a Medigap plan, it will likely cover this cost for you).

Part B Costs 2023

Medicare Part B premiums are based upon your modified adjusted household gross income (MAGI). The Social Security office will pull your IRS tax return from two years prior. They use that tax return to determine what you’ll pay for Parts B & D. (Part D premiums are also based on income.)

2023 Medicare Part B Premium is 164.90, and you are responsible for 20% (coinsurance) for all Part B services along with a $226 Part B deductible.

How much does Medicare cost at age 65? The monthly premium is set by CMS annually. The items that contribute to your modified adjusted gross income include any money earned through wages, interest, dividends from investments, and capital gains. It also includes Social Security benefits and tax-deferred pensions. Distributions from Roth IRAs and Roth 401(k)s, life insurance, reverse mortgages and health savings accounts do not count in the MAGI calculation.

If you filed jointly with a spouse, Social Security will base your premiums for each of you based on that married income. However, you will EACH pay your own Part B premium. Your premiums for Part B are always individual, not combined. Social Security simply uses your household income to determine where you fall individually in the Part B premiums chart.

Social Security will usually notify you of your next year’s premium annually in December or early January by mail.

Only about 5% of all Medicare beneficiaries currently pay higher Medicare premiums

2023 Medicare Part B IRMAA chart

It’s a good idea to keep an eye on these Medicare income limits in the future because they may be adjusted every few years. If you also qualify for Medicare due to End-Stage Renal Disease and recently had a transplant, you may be interested in the new Part B immunosuppressive drugs.

Medicare Cost for Part D for 2023

Just like Part B, your Medicare costs for Part D varies based on income. Your Medicare Part D Premiums for 2023 also vary by plan. Each state may have 20 or more plans to choose from.

You can find plans that start around $10 – $15/month in most states. Whatever the premium is for your plan, that is known as the base premium for Part D.

Medicare set the Part D deductible at $505 for 2023.

The Average Part D Premium is $42 per month.

All Insulin drugs are a flat $35 dollar copay.

Medicare Part D Premiums Chart for 2023

To determine your Medicare cost for Part D drug plans in 2023, review the table below.

If you find yourself in a higher income bracket because your earlier tax returns showed higher income than you now have after retirement, be sure click on link below to download appeal form to try getting a lower Part B and or Part D premium read our blog post on how to appeal a higher premium.

Click Below on green button to download IRMMA appeal high premium

Qualifying Reasons for a Medicare Part B
or Part D Premium Appealing Click Here

There are a number of reasons that you might qualify for a lower premium. Social Security calls these Life-Changing Events.

The most common reason is that you’ve stopped working or are working less hours as you move into retirement. In that case, your monthly income is likely quite a bit less than when you were working. For example, let’s say you are single and your income was $96,000 when you retired in 2021. After retirement, your income is only $40,000 from Social Security and IRA distributions. This gives you a pretty good case as to why you should not have to pay a higher Part B premium based on your former income.

Other reasons for an IRMAA appeal may include:

*marriage, divorce or being widowed

*the loss of income-producing property

*changes or termination of a pension

*receipt of a settlement from an employer due to company closure or bankruptcy

Sometimes people also disagree with the MAGI information that the IRS reported to Social Security. If that’s the case, you must contact the IRS and correct that information before you appeal. Filing an amended tax return might correct the issue.

We’ve had feedback from a number of clients about appeals and we’ve seen all sorts of outcomes. For example, if you had a year with some capital gains or a property sale that increased your annual income, we’ve seen it be a hit or miss with approvals. It may depend on how much was gained. Sometimes they adjust your premium. Other times they say…. well, you sure did make a lot of money on that tax return, so we think you can afford this higher Medicare Part B premium for a year.

If I have one takeaway for you, it would be this: it doesn’t hurt to try as long as you can demonstrate a change in your income. An appeal costs you nothing and if you state your case well enough, you might just save yourself some money. For tips on how to file and what to send, you can also watch our Youtube video about IRMAA appeals.

Key Takeaways

Social Security evaluates your income from 2 years prior to determine what you will pay for Medicare Part B and D in the current year.

The income brackets and premiums change every year.

You can appeal IRMAA if you have a qualifying event.

Costs of Medicare in 2023

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