Medicare annually reviews how well the coverage worked, the costs involved, and the spending. This annual review usually results in adjustments to the costs that are associated. Today we’ll discuss the changes that will occur in 2023 relating to Medicare.
In many cases, these changes are just minor cost adjustments, but in 2023 some other important updates will impact Medicare beneficiaries for years to come.
The Inflation Reduction Act or IRA was passed this year and proposed changes to the federal Medicare program. Even though the changes included in the IRA will be implemented over several years, some changes will begin in 2023.
One of the biggest changes is the insulin cap. Starting in 2023, participating insulin medications will cost no more than $35 for a month’s supply. This includes both insulins covered under Medicare Part B and Part D.
Another IRA change that’s taking effect in 2023 is the removal of the clause that keeps the Federal Government from negotiating drug prices. Starting in 2023, the Secretary of the Department of Health and Human Services will be able to negotiate the prices for 10 of the most expensive prescriptions covered by Medicare.
Drugs that can be affected must have been on the FDA’s approved list for nine years or more and have no competitors.
Medicare Part A and Part B both have monthly premiums. Most Americans receive Medicare Part A premium free and pay the standard Medicare Part B premium. For Medicare beneficiaries to get Medicare Part A at no cost, they must have paid Medicare taxes for 40 quarters (10 years).
For those who didn’t pay Medicare taxes for that time, the 2023 premium will increase as follows.
Medicare Part B’s standard premium is actually reducing in cost. It’s lowering by $7 from $170.10 to $164.90. Most Medicare beneficiaries will pay this amount, but there are some exceptions.
Low-income individuals can qualify for a Medicare Savings Program to help pay their Medicare Part B premiums. Beneficiaries that enjoy premium-free Part A will see their premiums decrease, while those who must pay for Part A will see a slight increase.
Medicare Part C is also called Medicare Advantage and combines your Original Medicare benefits into one plan. These plans have a $0 premium option in many areas. The 2023 nationwide average cost of a Medicare Advantage program is $18.
Medicare prescription drug coverage isn’t included in Original Medicare. To add this coverage, you must enroll in a Medicare Advantage plan that includes it, or a stand-alone Part D plan. These plans follow a standard model outlined by the Centers for Medicare and Medicaid Services. The average premium cost for Medicare Part D is projected to be $31.50 in 2023.
On the other hand, high-income earners will pay an Income Monthly Related Adjustment Amount. This IRMAA is based on their income and will add a modifier to their Medicare Part B and Part D premiums. The IRMAA uses the modified adjusted gross income and begins at $97,000 for individuals and $194,000 for those filing taxes jointly.
Medicare has updated all its deductibles for 2023. The Medicare Part A recurring deductible has increased to $1,600, while the annual Part B deductible increased to $226. Medicare Part D also saw an increase of $25 to its maximum allowable deductible, which will be $505 in 2023.
These changes will have bigger impacts on some Medicare beneficiaries than others. The biggest impact will be the IRA’s insulin cap and lower Part B premiums. A few will feel the Part A deductible and premium increases. However, most are enrolled in a Medicare Supplement or Medicare Advantage plan, which won’t apply to most Medicare beneficiaries.
Do you have any concerns about the upcoming changes to Medicare? Are you excited about any of the impending changes? Will these changes have a meaningful impact on you?