Medicare beneficiaries will experience several changes to Medicare benefits in 2023. Some of them relate to Medicare Advantage and Medicare Part D, the two plans that beneficiaries can switch from October 15 to December 7 during the annual enrollment period.
What is the Part B premium in 2023?
Part B is the main component of original Medicare that covers doctor’s visits and many other types of non-hospital care. Every beneficiary in Part B pays a premium, while lower-income beneficiaries may be eligible for help. (Part A provides hospital services, and most beneficiaries don’t pay a premium for Part A treatment.)
The Part B premium increased by 14.5% to $170.10 between 2021 and 2022. There were various reasons for the increase, but $10 of the $22 increase was added to create a reserve for potential reimbursement of the brand-new Alzheimer’s medication Adulhelm at the time. Subsequently, the pharmaceutical company decreased the price of the medication, and the Centers for Medicare and Medicaid (CMS) opted to restrict coverage for the medication.
The base Part B Medicare cost in 2023 will be $164.90, a $5.20 decrease from the $170.10 monthly premium in 2022.
What is the Part B deductible in 2023?
The Part B deductible is $233 for 2022 and will be $226 in 2023. The Part B deductible hasn’t decreased since 2012.
If you enroll in a Medicare Advantage plan rather than traditional Medicare, you are still responsible for paying the Part B cost. To be enrolled in a Medicare Advantage plan (also known as part C), you must enroll in Part B and pay the applicable premium. Additionally, you might have to pay a premium for the Medicare Advantage plan itself.
Premiums, deductible, and coinsurance for Part A
Medicare Part A covers hospitalization costs. There are out-of-pocket costs when participants need hospital care, although most enrollees do not pay a premium for Part A. You’ll have to pay a premium for Part A if you don’t have 40 quarters of work history (or a spouse with 40 quarters of work history).
Are Part A premiums expected to rise in 2023?
Only about 1% of Medicare Part A enrollees pay premiums; the remainder is eligible for free coverage based on their job history or spouse. The trend of Part A premium increases over time is continuing till 2023.
The Part A premium will increase to $278 per month in 2023 from $274 per month in 2022. It applies to those with 30 or more quarters of work history (but less than 40). Additionally, the Part A premium for persons with less than 30 quarters of work history will increase to $506/month in 2023 from $499/month in 2022.
Is the Medicare Part A deductible set to rise in 2023?
The deductible for Part A is applicable for each benefit period. Every year, the deductible typically rises. It will rise from $1,556 in 2022 to $1,600 in 2023. All Part A participants are subject to the deductible, although many have supplemental insurance covering the entire or a portion of the Part A deductible.
What is the cost of Medicare Part A coinsurance in 2023?
The Part A deductible pays for the first 60 inpatient days of an enrollee’s coverage period. There is a daily coinsurance charge if the person requires extra inpatient coverage during the same benefit period. Inpatient treatment will cost $400 per day from the 61st to the 90th day in 2023 (up from $389 per day in 2022). The lifetime reserve days coinsurance will increase to $800 per day in 2022 from $778 per day in 2022.
The first 20 days of care in skilled nursing facilities are covered by the Part A deductible paid for the inpatient hospital stay that preceded the stay in the skilled nursing facility. However, coinsurance applies to days 21 through 100 in a skilled nursing facility. It will increase to $200 per day in 2023 from $194.50 in 2022.
Can I still purchase Medigap Plans C and F?
MACRA prohibits individuals who become newly eligible for Medicare on or after January 1, 2020, from purchasing Medigap plans C and F (including the high-deductible Plan F). People who became Medicare-eligible before 2020 can keep their current Plan C or F or apply for those plans later, including coverage beginning in 2023.
The Part B deductible ($226 in 2023) is entirely covered by Medigap Plans C and F. However, some Medigap coverage demands that participants cover their own Part B deductible. The change is intended to reduce misuse of services by asking members to pay at least a fraction of the cost of outpatient care rather than having all expenses covered by a combination of Medicare Part B and a Medigap plan.
There is a high-deductible Plan G available in its place because the high-deductible Plan F was eliminated for newly eligible members beginning in 2020.
Will Medicare recipients in high-income tiers receive inflation adjustments in 2023?
Yes. The premiums that consumers pay for Part B—including those who pay the high-income surcharge—are falling, and the threshold for high-income surcharges (and each income category) is rising for 2023.
High-income Medicare patients pay more for Part B and Part D, but what does “high income” mean?
The high-income bracket was $85,000 ($170,000 for a married couple). However, starting in 2020, the income brackets started to be modified for inflation. In 2023, it will rise to $97,000 for a single person and $194,000 for a married couple. The relatively strong inflation we experienced in 2022 caused a massive increase in 2023. Please keep in mind that the surcharge in 2023 will be based on income tax returns from 2021, as those are the most recent tax returns on file when 2023 begins.
The Part B premium for high-income beneficiaries in 2023 varies from $230.80/month to $560.50/month, depending on income (a decrease from 2022, when premiums for high-income beneficiaries varied from $238.10/month to $578.30/month).
New income tiers were established to determine Part B premiums for high-income Medicare members as part of the Medicare payment solution that Congress approved in 2015 to address the “doc fix” issue. When these new brackets were enacted in 2018, they moved some high-income registrants into higher premium categories.
Additionally, a new high-end income group was established in 2019, increasing Part B premiums for enrollees with extremely high incomes. There is now a category for enrollees with an income of $500,000 or more ($750,000 or more for a married pair). This was opposed to grouping everyone with income above $160,000 ($320,000 for a married couple) into one bracket.
In 2023, people in this group will pay $560.30 per month for Part B. Since 2020, the minimum income requirement has stayed at $500,000 for a single person and $750,000 for a couple. However, the thresholds for the other brackets have gone up every year. It began with the lowest bracket, which went from $85,000 to $87,000 in 2020, and so on. The same adjustment has been made at every level but the highest).
What are the changes in Medicare Advantage premiums for 2023?
Apart from the cost of Part B, the average Medicare Advantage (Medicare Part C) premium is anticipated to be roughly $18 per month in 2023. It is down from $19.52 per month in 2022 and $23 per month in 2020. For some years, average Advantage premiums have been dropping.
All Medicare Advantage plans, including those without integrated Part D coverage, are included in the average premiums mentioned above. Additionally, most Advantage members (i.e., those in “zero premium” Advantage plans) pay no premiums other than the price of Part B, which lowers the total average. Let’s look at Advantage rates for plans that include Part D. The average premium is much higher ($58/month for persons with Advantage plans that contain Part D and have a monthly premium).
In 2022, more than 29 million individuals had Medicare Advantage insurance. For more than 15 years, participation in these plans has been increasing gradually, and CMS anticipates that trend to continue in 2023 when enrollment is expected to reach 31.8 million people. Even though the overall number of Medicare enrollees has been gradually increasing, Medicare Advantage enrollment has exceeded by a significant margin. Only 13% of Medicare recipients in 2004 had Medicare Advantage coverage. By 2022, that had increased to more than 46%.
Is the out-of-pocket maximum for Medicare Advantage changing in 2023?
Medicare Advantage plans are supposed to limit subscribers’ out-of-pocket expenditures for Part A and Part B treatments (unlike Original Medicare, which does not have a cap on out-of-pocket costs). The cap does not apply to prescription drug expenses because Medicare Part D covers them (even when integrated with a Medicare Advantage plan).
For numerous years, the cap was $6,700, while most plans had lower out-of-pocket maximums. The maximum out-of-pocket limit for Medicare Advantage plans has been raised to $7,550 for 2021 and 2022 (plus out-of-pocket costs for prescription drugs). The cap will rise to $8,300 in 2023. However, most Advantage plans will still have lower out-of-pocket caps than the government allows.
How will Medicare Part D prescription drug coverage change in 2023?
The average monthly Part D premium is anticipated to drop to $31.50 in 2023 from $32.08 in 2022. But as is customary, a wide range of alternatives and premiums will be available.
The highest permissible deductible for ordinary Part D plans for stand-alone Part D prescription medication coverage increased to $480 in 2022 from $445 in 2021. In 2023, this will rise to $505.
Additionally, the out-of-pocket threshold, at which catastrophic coverage kicks in, will rise from $7,050 in 2022 to $7,400 in 2023 (note that this is a result of a combination of drug manufacturer discounts and the enrollee’s costs; actual out-of-pocket costs for the enrollee will be around $3,100 when the catastrophic coverage level is reached).
When people reach catastrophic coverage in 2021, their copays will rise slightly to $4.15 for generic and $10.35 for brand-name medications. Beneficiaries who take more expensive medications will continue to cover 5% of the cost during the catastrophic coverage phase (whichever is higher: the 5% or the copay). But as a result of the Inflation Reduction Act, cost-sharing in the catastrophic coverage phase will end entirely as of 2024.
In addition, Medicare Part D enrollees will immediately benefit from the Inflation Reduction Act in 2023. Part D will no longer need cost-sharing for recommended vaccinations, making them completely free. Additionally, all Part D plans must offer copays of no more than $35 per month for all eligible insulin supplies. It extends the existing Senior Savings Model to all Part D plans, including Medicare Advantage plans with integrated Part D coverage.
We know that Medicare will undergo significant changes in 2023. Know that our team is here for you whether you are a new beneficiary of Medicare or an established beneficiary. We can assist you whether you’re curious about Medigap or have general inquiries regarding Medicare.
Open enrollment runs from October 15 through December 7. Any changes you make will be effective as of January 1, 2023.
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