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Medicare premiums and deductibles set to go down in 2023

Yahoo Finance's Kerry Hannon joins the Live show to break down the decrease in Medicare premiums and deductibles forecasted for 2023.

Video Transcript

RACHELLE AKUFFO: All right, well, seniors on Medicare are getting some good news this week. Their premiums and deductibles will be going down next year. Yahoo Finance senior columnist Kerry Hannon is here to explain. So Kerry, what do we need to know?

KERRY HANNON: Well, Rachelle, this is a bit of good news, welcome news for retirees because Medicare announced this week, the CMS said that premiums for Part A are going to drop slightly, and so will the deductibles. Now, we're not talking massive savings. It's down a little over $5 for the premiums per month and about $7 for deductibles. But this is welcome news because these premiums, Part A covers doctors and things technically not under part A, maybe medical equipment, those kinds of things.

And so the point is, this is great news if you pair it with what we're thinking might be an 8.7% bump in Social Security benefits, which will-- the cost of living adjustment, which will be announced October 13. And you see the Part A deductible, that comes directly out of the Social Security benefit. So that means that it's kind of a two-puncher for Social Security benefit receivers because they'll get a little extra more in that benefit, we're hoping, in next year. So, good news.

Caveat, let's put this in perspective. Last year, the Medicare premiums bounced up 14.5%. So this is kind of like making a refund for some of that big jump from last year, which, as we were just talking about in the last segment, Biogen's last Alzheimer's drug, they had built in the cost. The CMS thought they were going to be funding that at that point. They anticipated it. They added that in because that's an outpatient drug that was to be administered outpatient.

So it was going to be charged as part of this Part A premium. They bumped them up 14.5%. They decided, as we know now, not to fund that. There's this great new Alzheimer's drug now on the way. But for now, so this is a good news. But it's kind of making up for this big jump from last year. Also, they did say they're going to bump up the premiums for the Part A deductible. So we were just talking about Part B. Part A is the stuff for inpatient hospital, so that's going to go up a little bit and the premium for that a little bit as well.

DAVE BRIGGS: OK, Kerry, when does open enrollment start? And do people get a chance to look at plans for next year?

KERRY HANNON: Yes, yes, yes, good news. Yeah, they can go-- October 15, it opens back up. The plans are-- start going to be announced around October 1. You should find information on the website there for CMS. And enrollment will run from October 15 to December 7, and you can really do some shopping research and that sort of thing. It's a good step to take.

RACHELLE AKUFFO: Kerry Hannon, always giving us news we can use. We do appreciate it. Have a good day.