I have read that retirees will be getting a nice cost-of-living increase in our Social Security benefits next year but what about Medicare? What will the Medicare Part B monthly premiums and other Medicare costs be in 2023?

From an entitlement program standpoint, 2023 is going to be a very good year for retirees! Not only will you receive a nice 8.7% cost-of-living increase in your Social Security retirement benefits – the largest since 1981 – the Centers for Medicare and Medicaid Services also recently announced that your Medicare Part B standard monthly premium will be lowered 3%, or $5.20, from the current rate of $170.10 per month, to $164.90 per month in 2023.

The reason for the reduction is a correction to last year's hefty Part B premium increase, which was larger than it needed to be. The 2022 premium hike of about 14.5% was announced amid uncertainty about the potential impact of a new Alzheimer's drug called Aduhelm, which threatened to cause a surge in Medicare costs. To curb costs, Medicare sharply limited coverage of the drug and the cost of the drug was cut roughly in half from an original cost of $56,000 a year. The price increase without an offsetting increase in costs created a large financial reserve for Part B, allowing the program to reduce next year's premium.

You will also be happy to know that in addition to the premium reduction, the annual deductible for Medicare Part B will also be lowered $7 from $233 in 2022, to $226 in 2023. If you have a Medicare Part D prescription drug plan, the average premium in 2023 will be about $31.50, which is a 1.8% decrease from $32.08 in 2022.

The deductible for Medicare Part A (hospital coverage) per benefit period (which generally starts upon admittance to the hospital) will be $1,600 in 2023, up $44 from this year's $1,556. That applies to the first 60 days of inpatient care. For the 61st through 90th day, the coinsurance will be $400 per day, up from $389 this year. For days 91 to 150, the charge will be $800 per day (up from $778 in 2022). Care in a skilled nursing facility coinsurance for days 21-100 will also increase to $200 per day, up from $194.50 in 2022.

Wealthy Beneficiary Impact

High earning Medicare beneficiaries, which makes up about 7% of all Medicare recipients, will also receive a break in 2023. Medicare surcharges for high earners are based on adjusted gross income (AGI) from two years earlier, which means that 2023 Part B premiums are determined by 2021 annual income.

If your 2021 income was from $97,000 to $123,000 as an individual filer, or between $194,000 to $246,000 for married couples filing jointly, your 2023 Part B monthly premium will be $230.80 in 2023, down from $238.10 in 2022.

Monthly premiums for individual filers with an income between $123,000 and $153,000, or from $246,000 to $306,000 for joint filers, will decrease to $329.70 in 2023, from $340.20 in 2022.

Individuals earning in excess of $153,000 to $183,000, or $306,000 to $366,000 for joint filers, will see their monthly premium decrease from $442.30 in 2022, to $428.60 in 2023.

Taxpayers with incomes from $183,000 to $500,000, or $366,000 to $750,000 for joint filers, will have premiums of $527.50 in 2023, down from $544.30 in 2022.

Single filers with income of $500,000 or more, or married filing jointly taxpayers with income of $750,000 or more, will pay $560.50 per month in 2023, down from premiums of $578.30 in 2022.

High-income beneficiaries with a Medicare Part D prescription drug plan will also pay a little less next year. If your income was over $97,000 as a single filer, or $194,000 for joint filers, there will be a surcharge ranging between $12.20 to $76.40 monthly, based on your income level.

For more information on Medicare's 2023 costs see Medicare.gov/basics/costs/medicare-costs.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.