Compliance News | October 4, 2022
The Centers for Medicare & Medicaid Services (CMS) recently released the Medicare Part B premiums and deductible and the Part A deductible and coinsurance that will take effect on January 1, 2023. Both the standard Part B premium and the Part B deductible for all Medicare beneficiaries will decrease by just over 3 percent. In contrast, the Medicare Part A inpatient deductible and coinsurance for hospital stays and care in a skilled nursing facility will increase by nearly 3 percent.
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Sponsors of group health plans that cover retirees need to know this information when reviewing their coverage for Medicare-eligible retirees, including those enrolled in Medicare Advantage Plans.
Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment and other items. According to the September 27, 2022 announcement, the standard monthly Part B premium will be $164.90 for 2023, a decrease of $5.20. In 2023, the annual deductible for Medicare Part B beneficiaries will be $226, a $7 decrease. The 2023 decrease is partly attributable to lower-than-projected spending for a new drug to treat Alzheimer's disease, Aduhelm®, which was ultimately only covered by Medicare for individuals participating in clinical trials.
| 2022 | 2023 | |
|---|---|---|
| Standard Monthly Part B Premium | $170.10 | $164.90 |
| Medicare Part B Deductible | $233.00 | $226.00 |
Since 2007, high-income Medicare-eligible individuals who enroll in the Part B program have been required to pay a monthly Part B premium that is higher than the standard premium on a sliding scale. The Part B premium for high-income Medicare-eligible individuals varies depending upon an enrollee’s modified adjusted gross income and income tax filing status. The income-adjusted premiums for 2023, which are shown in the table below, will be lower than they are for 2022.
The last column of the table shows the 2023 income-related monthly adjustments for the Part D premium. Those adjustments began in 2011. The ACA requires Part D enrollees whose incomes exceed the thresholds established for Part B to pay their regular Part D premium to their plan (that amount will vary based on the plan they choose) and also pay an income-related adjustment to Medicare. CMS projects the average basic monthly premium for standard Part D coverage will be $31.50 for 2023, down from $32.08 in 2022.
| Income Ranges for Individual Return Tax Filing Status* | Income Ranges for Joint Return Tax Filing Status | Monthly Adjustment Amounts for Part B Premium | Total Monthly Part B Premium | Part D Premium Monthly Adjustment Amounts |
|---|---|---|---|---|
| $97,001 to $123,000 | $194,001 to $246,000 | $65.90 | $230.80 | $12.20 |
| $123,001 to $153,000 | $246,001 to $306,000 | $164.80 | $329.70 | $31.50 |
| $153,001 to $183,000 | $306,001 to $366,000 | $263.70 | $428.60 | $50.70 |
| $183,001 to $499,999 | $366,001 to $749,999 | $362.60 | $527.50 | $70.00 |
| $500,000* | $750,000+* | $395.60 | $560.50 | $76.40 |
* Married beneficiaries with income of more than $97,000 but less than $403,000 who file a separate return from their spouse and lived with their spouse at some time during the taxable year must pay the following Part B monthly premium adjustment in 2023: $362.60 (resulting in a total monthly premium of $527.50). (The Part D monthly adjustment for these couples will be $70.00.) Married beneficiaries with income of more $403,000 who file a separate return from their spouse and lived with their spouse at some time during the taxable year must pay the following Part B monthly premium adjustment in 2023: $395.60 (resulting in a total monthly premium of $560.50). (The Part D monthly adjustment for these couples will be $76.40.)
Medicare enrollees who receive a kidney transplant lose eligibility for full Medicare coverage after 36 months. Beginning in 2023, those individuals can pay a premium to continue Part B coverage of immunosuppressive drugs. The 2023 immunosuppressive drug premium will be at least $97.10 per month. High-income beneficiaries will pay a higher premium for this coverage, as shown in the following table.
| Income Ranges for Individual Return Tax Filing Status* | Income Ranges for Joint Return Tax Filing Status | Monthly Adjustment Amounts | Total Monthly Premium |
|---|---|---|---|
| $97,001 to $123,000 | $194,001 to $246,000 | $64.70 | $161.80 |
| $123,001 to $153,000 | $246,001 to $306,000 | $161.80 | $258.90 |
| $153,001 to $183,000 | $306,001 to $366,000 | $258.90 | $356.00 |
| $183,001 to $499,999 | $366,001 to $749,999 | $356.00 | $453.10 |
| $500,000* | $750,000+* | $388.40 | $485.50 |
* Married beneficiaries with income of more than $97,000 but less than $403,000 who file a separate return from their spouse and lived with their spouse at some time during the taxable year must pay the following premium adjustment in 2023 for Part B immunosuppressive drug coverage: $356.00 (resulting in a total monthly premium for that coverage of $453.10). Married beneficiaries with income of more $403,000 who file a separate return from their spouse and lived with their spouse at some time during the taxable year must pay the following premium adjustment in 2023 Part B immunosuppressive drug coverage: $388.40 (resulting in a total monthly premium for that coverage of $485.50).
Part A pays for inpatient hospital, skilled nursing facility, hospice and certain home healthcare services. The Part A deductible and coinsurance increases are noted in the following table.
| 2022 | 2023 | |
|---|---|---|
| First-day Part A hospital deductible | $1,556.00 | $1,600.00 |
| Daily Part A coinsurance for the 61st through 90th day of a hospital stay* | $389.00 | $400.00 |
| Daily Part A coinsurance for hospital stays longer than 90 days | $778.00 | $800.00 |
| Daily Part A coinsurance for the 21st through 100th day in a skilled nursing facility | $194.50 | $200.00 |
* There is no cost-sharing requirement for the second through 60th day of a hospital stay.
Many public plans and employers have current and future retirees that do not have, or will not qualify for, zero-premium Part A coverage. Alternative market opportunities and strategies exist to provide benefits to these retirees in a more effective manner.
Plan sponsors that reimburse Medicare-eligible retirees for Part B premium costs will likely want to revisit their payment policies to ensure that they accurately reflect the new premiums.
Plan sponsors should ensure that if they reimburse retirees for Part B costs, they do so in a clear manner that states the amount reimbursable, and do not merely state that Medicare premiums will be reimbursed.
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