- Wiser Medicare
Medicare’s Major Changes for 2023
As a Medicare beneficiary, you expect to see changes each year in premiums, deductibles and out-of-pocket expense limits, but 2023 also brings many beneficial changes thanks to landmark legislation signed in August 2022: the Inflation Reduction Act of 2022.
Here’s a closer look at the most significant changes to Medicare in 2023.
Changes in costs
Each year, Medicare changes its cost structure to reflect increases and decreases caused by how Medicare is used and what has happened in the economy. For 2023, the following costs will be in place:
Part A costs are increasing: Part A (Hospital insurance) charges no premiums to most enrollees based on their (or their spouse’s) work record of 40 or more quarters of work. For 30 to 39 quarters of work, the monthly premium increases from $274 to $278 for 2023. For less than 30 quarters, the monthly premium increases from $499 to $506. The deductible also goes up: from $1,556 to $1,600. And the daily coinsurance for days 61-90 of inpatient care increases from $389 to $400 per day. After that, the copayment is $800 per day. Beneficiaries with Medicare Advantage plans will want to check with their plan on hospital charges.
Part B costs are decreasing: Part B premiums affect virtually every Medicare beneficiary unless it is paid for them by one assistance program or another. Part B (Medical insurance) monthly premiums go down from $170.10 in 2022 to $164.90 in 2023 for beneficiaries not considered high-income earners. The Part B annual deductible also decreases – from $233 in 2022 to $226 for 2023 – representing the first such drop in a decade.
Other costs: Annual deductibles in Part C Medicare Advantage plans and stand-alone Part D prescription drug plans vary by where you live and what plan you pick. The maximum upper limit of Part D deductibles is $505 in 2023, compared with $480 in 2022.
Thanks to the Inflation Reduction Act, the 64 million people enrolled in Medicare – and the 50 million with Medicare Part D prescription drug plans – will enjoy some immediate benefits and some that will come in the future.
Capped insulin copayments
About one-third of Medicare’s beneficiaries have diabetes, and 3.3 million use insulin. The cost of insulin has escalated over the years, leading the Centers for Medicare & Medicaid Services (CMS) to look for a solution. In 2021, it started a 5-year test: the voluntary Part D Senior Savings Model that provides access to insulin at a predictable price of $35 or less per month.
The Inflation Reduction Act didn’t wait for the results of the CMS test. Instead, starting on January 1, 2023, the cost of insulin is limited to $35 per month under Part D plans, even if annual deductibles have not yet been met. Note that not every plan covers every type of insulin.
When insulin is covered by Medicare Part B as “durable medical equipment,” starting on July 1, enrollees who take their insulin through a pump will also not have to pay a deductible and will benefit from the $35 price limit.
Takeaway action step: If you use a covered insulin product, you can add, drop or change your Part D prescription drug plan once during 2023. Because of the price transition, you might be charged more than $35 in the first month or two of the year. If this happens, contact your plan about getting reimbursed. Your plan must reimburse you within 30 calendar days. If you need further help, call Medicare at 1-800-MEDICARE (1-800-633-4227) or contact your local State Health Insurance Assistance Program (SHIP).
Free vaccines
Covid-19, flu, pneumonia and hepatitis B vaccines are usually free under Part B and will continue to be. Other free shots include those to treat specific injuries or exposure to diseases, such as hepatitis A, tetanus and rabies.
Some vaccines have required a copayment, such as shingles shots that can cost up to $200 per dose. In 2020, 4.1 million Medicare beneficiaries with Part D coverage received vaccines, primarily for shingles prevention. But starting on January 1, 2023, all vaccines recommended for adults by the CDC’s Advisory Committee on Immunization Practices (ACIP) and covered by Medicare Part D will have no copayment, even if the plan’s deductible hasn’t been met.
Adult vaccines will also be more readily available through other programs, such as Medicaid and the Children’s Health Insurance Program (CHIP).
Takeaway action step: Talk with your doctor to be sure you get the right vaccines for you. Then check to see if the vaccine is covered by Medicare Part B or Part D (if you have a Part D prescription drug plan).
Control over drug pricing
The Inflation Reduction Act limits how much drug manufacturers can raise prices. Starting in 2023, they will have to pay the federal government a rebate if Medicare-covered drug prices increase faster than the inflation rate.
That benefit may not flow directly to Part D plan participants, but it should discourage annual drug price increases for Medicare beneficiaries and possibly influence future Part D premiums.
Several other measures will impact drug prices in the future, although they won’t be felt right away. For example, by September 1, 2023, Medicare will announce the first ten Part D drugs to have their prices negotiated with drug manufacturers, but the new prices will only be effective in 2026. More drugs will undergo price negotiations in subsequent years. Also, starting in 2025, a $2,000 cap will be placed on out-of-pocket costs for prescription drugs.
Changes in access
In 2023, several areas will offer expanded – or easier – access to coverage. Following are some of those areas.
Increased emphasis on behavioral health: Starting January 1, 2023, Medicare expanded access to prevention and treatment services for substance use disorders and mental health services. Medicare will pay for licensed clinical social workers, psychologists and behavioral health specialists to be part of a beneficiary’s primary care office visit to make behavioral health services more accessible for Medicare participants.
Longer coverage for immunosuppressive drugs after a kidney transplant: In the past, kidney transplant recipients received the required immunosuppressive drugs through Medicare Part B for 36 months, regardless of age. But, starting in 2023, if a transplant recipient with kidney-related Medicare Part B has no other sources of health care coverage, Part B will continue to cover immunosuppressive drugs beyond that 36-month limit – until the recipient reaches full Medicare access at age 65.
Takeaway action step: If you need help with the cost of immunosuppressive drugs, call Medicare at 1-800-MEDICARE (1-800-633-4227) or contact your local State Health Insurance Assistance Program (SHIP).
Improved enrollment access: In the past, if you signed up for Medicare after your Initial Enrollment Period (around your 65th birthday), you often had to wait two or three months for their coverage to begin. Starting in 2023, if you apply for Medicare either during the General Enrollment Period (January 1 to March 31) or during a Special Enrollment Period, your coverage takes effect at the beginning of the following month.
Also, the events that trigger a Special Enrollment Period have been broadened to include missing your Initial Enrollment Period because of a natural disaster, not signing up when supposed to because of inadequate information received from an employer or losing your Medicaid coverage.