Personal Finance

Average premiums for Medicare prescription drug coverage are set to dip to about $31.50 a month in 2023, deductibles to rise

Key Points
  • A small drop in monthly premiums to roughly $31.50 from $32.08 is expected for Part D prescription drug coverage in 2023, the government announced late last week.
  • The maximum deductible for Part D coverage is projected to rise to $505 in 2023, up from $480 this year, according to information released in April by Medicare officials.
  • Keep in mind that higher earners pay more for their premiums via income-related monthly adjustment amounts, or IRMAAs.
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Medicare beneficiaries may see their premiums for prescription drug coverage dip in 2023, although their deductibles might rise.

The average basic monthly premium for Medicare Part D is projected to be about $31.50 next year, down 58 cents, from $32.08 in 2022, according to the Centers for Medicare & Medicaid Services.

Meanwhile, the maximum deductible next year for drug coverage is projected to rise to $505, up from $480 this year, according to information released by the agency several months ago. Not all plans come with a deductible, or they may have one that is much smaller than the maximum allowed.

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Roughly 49 million Medicare beneficiaries have prescription drug coverage. Some get it as a stand-alone Part D plan alongside original Medicare (Part A hospital insurance and Part B outpatient care coverage).

Other individuals enroll in Advantage Plans that come with drug benefits. And it's common to find such plans that come with either a small monthly payment or a low one (excluding your Part B premium).

"We should continue to see lots of zero- or low-premium Advantage Plans with enticing benefits next year," said Danielle Roberts, co-founder of insurance firm Boomer Benefits.

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Be aware that deductibles and premiums can both vary widely from plan to plan, as can the specifics of what prescription drugs are covered and how much you'll pay for them. (Congressional Democrats are aiming to pass a bill that would allow Medicare to negotiate the price of some drugs, as well as cap your out-of-pocket cost for prescriptions at $2,000 per year.)

In addition, some Medicare beneficiaries pay more for Part D premiums because their income is high enough to generate so-called income-related monthly adjustment amounts, or IRMAAs. Those extra amounts also apply to Part B premiums.

In 2022, those monthly surcharges kick in for single tax filers at $91,000 and for married couples filing joint tax returns at $182,000. There are some strategies you can use to try avoiding IRMAAs or reducing them.

Medicare's open enrollment period — when you can sign up for an Advantage Plan and/or drug coverage for 2023 — opens Oct. 15 and runs through Dec. 7.