As elder law attorneys, we keep a finger on the pulse of government benefits for seniors, and Medicare is one of them. In this post, we are going to share some information about the 2023 Medicare out-of-pocket costs, because they have been adjusted as they are every year.
Four Distinct Parts
Medicare is broken up into four distinct parts. The hospitalization component is Part A, and there is no monthly premium if you have earned eligibility through your payroll tax contributions.
To provide a brief explanation of the eligibility requirement, you have to accumulate at least 40 retirement credits while you are working and paying these taxes. You can earn a maximum of four credits per year, and in 2023, you get one credit for every $1,640 you earn.
It should be noted that a married person can obtain eligibility through their spouse’s work record if necessary.
Part B covers medical treatments that are provided by doctors and other health care providers, but the beneficiary must pay 20 percent of covered expenses.
Part C gives you the ability to use your benefit to buy into a Medicare Advantage Plan that bundles all of the other parts. Medicare Part D is the prescription drug component.
Part A Deductible and Coinsurance Increases
As we have stated, there is no monthly premium for Part A if you have earned the necessary 40 retirement credits. However, there is an annual deductible that has is now $1,600.
This deductible will cover the first 60 days of inpatient care, but you have to pay coinsurance for days 61 through 90. The daily coinsurance in 2023 is $400 per day.
Beneficiaries get 60 lifetime reserve day that cover stays that are longer than 90 days, but the coinsurance requirements are quite a bit higher. The coinsurance is $800 for each lifetime reserve day.
Medicare Part B Premiums and Deductible
You do have to pay a monthly premium for Part B, and there is a deductible. Because certain spending allocations were not exhausted last year, it has actually gone down. This year, most people pay $164.90 a month.
Filers that are in higher brackets pay more, and there are several different thresholds. You can visit the Centers for Medicare and Medicaid Services website to see the entire table.
The deductible this year is $226, and this represents a $7 decrease.
We should point out the fact that beneficiaries are “held harmless” if the Medicare Part B increase exceeds the Social Security cost-of-living increase in a given year. This means that they would not receive a reduced Social Security benefit.
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