What's New in 2023?
Updated: Jan 17
What benefit and regulatory changes do you need to know about in 2023? This article recaps the ones impacting older adults the most.
Social Security Payments Increase
After another tumultuous year of supply chain disruptions, high inflation, and soaring grocery prices, older adults will finally see some financial relief. America’s 65 million+ Social Security beneficiaries are receiving an 8.7 percent increase in their monthly checks in 2023. This is the largest cost of living adjustment (COLA) since 1981. The Social Security Administration says this will add $146 to the average monthly benefit, increasing it from about $1,681 to $1,827. This significant increase is critical for retirees on fixed incomes. Veterans who receive disability benefits and retirement pay will also see an increase. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.
Medicare Premiums Drop
The Centers for Medicare & Medicaid Services (CMS) are decreasing Medicare Part B premiums and deductibles. Part B premiums are usually deducted directly from a beneficiary’s monthly Social Security payment. Part B beneficiaries will see a $5.20 decrease in premiums from 2022. The cost will go from $170.10 per month in 2022 to $164.90 in 2023. The annual Part B deductible for 2023 is decreasing to $226, a reduction of $7.00 per month. This is the first time in over a decade that Medicare premiums haven't increased, which gives older adults a welcome respite from rising costs.
Historic Cost of Living Increase (COLA)
VA increased compensation payment rates based on the latest cost-of-living adjustment (COLA) announcement. Beginning January 1, 2023, veterans and beneficiaries who receive VA compensation benefits started seeing an 8.7% increase in their monthly payments—the largest increase in over 30 years. The annual COLA increase is tied to the Social Security rate change and is based on the consumer price index (CPI).
VA Pension Changes
For older veterans and surviving spouses who need long-term care, VA Pension Aid & Attendance can make a real difference in quality of life. In late 2022, the VA announced the updated VA Pension rates that went into effect on December 1, 2022.
Beneficiaries who receive Dependency and Indemnity Compensation (DIC) will also see an increase in their payment amounts.
Inflation Reduction Act
Signed into law on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) directs new federal spending toward several projects, including lowing healthcare costs. Of interest to older adults is how the IRA will help close the gap in access to medication by improving prescription drug coverage and lowering drug prices in Medicare. The law caps the amount that seniors will have to pay for prescription drugs they buy at the pharmacy at $2,000 a year. In addition, the IRA seeks to lower prescription drug costs by allowing Medicare to negotiate prices with drug companies, put an inflation cap on drug prices, and lower out-of-pocket expenses for Medicare recipients.
$35 Insulin Cap
One key feature of the Inflation Reduction Act is the $35 per month out-of-pocket insulin cap for Medicare beneficiaries, which is delivering much-needed relief to the approximately 3 million seniors across the nation who rely on insulin. Capping insulin costs for Medicare beneficiaries means that seniors will no longer have to decide between purchasing this life-saving medication and putting food on the table. For Medicare drug plans (Medicare Part D), the change was effective January 1, 2023; for Medicare Part B (if you’re medically required to take insulin through a pump that is considered durable medical equipment), the change is effective July 1, 2023. You won’t have to pay a deductible (if your plan has one) for covered insulin.
IRS Gift Limits
The annual gift tax exclusion for 2023 rose to $17,000 – an increase from $16,000 in 2022.
As you can see, the news isn’t all bad when it comes to changes affecting older adults in 2023. If you have any questions about these changes and how they might affect you or someone you love, give Takacs McGinnis a call at 615.824.2571.