Recent changes to Medicare may have a big impact on current enrollees and people who are planning to enroll soon. If you depend on Medicare for your health insurance, keep up with the coverage and cost issues impacting Medicare in 2023.
Original Medicare Premium and Out-of-Pocket Costs
Each year, CMS announces the premiums, out-of-pocket costs and income-related surcharges for Medicare Part A and Medicare Part B, also known as Original Medicare or Traditional Medicare.
Most people qualify for premium-free Medicare Part A. For 2023, the standard monthly premium for Medicare Part B is $164.90. Although the Medicare Part B premium normally increases, this is actually a decrease of $5.20 from the year before. (Important: Anyone earning more than $97,000 a year for individuals or $194,000 for couples filing jointly has to pay an income-related monthly adjustment amount, which raises the cost of the Medicare Part B premium.)
The premium isn’t the only cost you have to worry about. Before coverage kicks in, you have to meet the deductible. The Medicare Part A deductible increased for 2023. The inpatient hospital deductible went from $1,556 in 2022 to $1,600 in 2023. The good news is that, like the Medicare Part B premium, the Medicare Part B deductible also decreased, going from $233 in 2022 to $226 in 2023. You’ll also have to pay a coinsurance cost or copay for most medical services.
Medicare Advantage Options
According to KFF, just over half of all Medicare beneficiaries chose to enroll in a Medicare Advantage plan for plan year 2023.
Also called Medicare Part C, Medicare Advantage plans are offered by private insurance companies. Out-of-pocket costs vary, but Medicare Advantage plans include an annual out-of-pocket maximum, so your covered out-of-pocket costs will be limited each year. Some plans also have a premium that you have to pay on top of the Medicare Part B premium. (Important: If you choose a Medicare Advantage plan, you still have to pay the Medicare Part B premium!) CMS says the average Medicare Advantage premium for 2023 is only $18.
Medicare enrollees often have many plans to choose from. KFF says the average Medicare beneficiary has access to 43 Medicare Advantage plans in 2023.
Medicare Part D Prescription Drug Plan Options
Like Medicare Advantage, Medicare Part D plans are offered by private companies, and the costs can vary.
CMS says the average basic monthly premium for standard Medicare Part D premium is $31.50 in 2023. This is a slight decrease from 2022, when the average premium was $32.08. (Important: High-income earners may have to pay an income-related monthly adjustment surcharge that increases the cost of the premium.)
Star Ratings
Medicare plans are given star ratings to help enrollees compare the service available in different plans.
Star rating dropped in 2023. This may alarm some enrollees, but the decrease does not necessarily indicate worsening customer service quality. According to Fierce Healthcare, flexibilities that were put in place during the pandemic have ended, and this contributed to the decline. In other words, the way ratings were calculated changed between 2022 and 2023, and this caused average ratings to drop. In 2022, 68% of Medicare Advantage Prescription Drug plans had a rating of four stars or high. In 2023, only 51% do.
Insulin Coverage
Medicare enrollees with diabetes will be happy to know about a new $35 cost cap for insulin.
The cap is going into effect in two separate phases. According to CMS, insulin that’s covered under Medicare Part D is capped at $35 as of January 1, 2023. This means you won’t pay more than $35 for a month’s supply of an insulin prescription that is covered under your plan. Insulin that is delivered by an insulin pump is covered under the Medicare Part durable equipment benefit. It will also be capped at $35 for a month’s supply, but this cap doesn’t go into effect until July 1, 2023.
COVID-19 Coverage
The COVID-19 public health emergency ended on May 11, 2023, bringing about the end of many temporary flexibilities and rule changes introduced to ease problems caused by the pandemic. Some of these changes impact Medicare coverage.
According to HHS, coverage for COVID-19 vaccines will not generally be impacted. However, Original Medicare will no longer cover over-the-counter COVID-19 tests. Some Medicare Advantage plans may continue to cover these tests, but enrollees will need to contact their plan to find out. Medicare will continue to cover lab tests that are ordered by a physician or certain other health providers with no cost sharing.
Medicaid Continuous Enrollment
Although Medicaid is a separate program, many people are eligible for both Medicare and Medicaid, so changes to Medicaid impact a large number of Medicare enrollees.
During the COVID-19 pandemic, Medicaid programs implemented continuous enrollment, which allowed people to stay enrolled without having to resubmit paperwork to prove ongoing eligibility. According to KFF, the continuous enrollment provision ended on March 31, 2023. Between 5 million and 14 million people could lose Medicaid coverage over a 12-month period as states reintroduce old requirements for continued eligibility.
New Enrollment Rules
CMS has issued a final rule that included changes to Special Enrollment Periods and enrollment timelines. According to KFF, there are four key changes related to Medicare enrollment and eligibility:
- New Initial Enrollment Period rules reduce coverage gaps. Under the new rules, when individuals enroll in Medicare during the last three months of their Initial Enrollment Period, coverage begins on the first day of the following month. Previously, individuals could face longer coverage gaps.
- New General Enrollment Period rules reduce coverage gaps. The General Enrollment Period runs from January 1 to March 31 each year. Previously, coverage started on July 1. Under the new rules, coverage starts on the first day of the month after the person enrolls.
- New Special Enrollment Periods apply to five situations. Individuals impacted by an emergency or disaster, who experience a health plan or employer error, who were formerly incarcerated, who lost Medicaid or who experienced other exceptional conditions may have an opportunity to enroll.
- A new drug benefit helps kidney transplant patients. An immunosuppressive drug benefit applies to kidney transplant patients who would otherwise lose access to Medicare coverage and gives them access to coverage from immunosuppressive drugs.
Now you know what’s happening to Medicare in 2023, but what about other important updates? Silver&Smart keeps you up to date on Medicare, retirement planning and retirement life. Subscribe today.