Originally posted October 2022
Medicare Open Enrollment is right around the corner, with an official kickoff of October 15th. This is your one guaranteed chance each year to take a look at your coverage and decide if it’s working for you. If not, then you can change your plan in a few different ways, including:
- Switching from Original Medicare to Medicare Advantage
- Changing from one Medicare Advantage plan to another
- Enrolling in a standalone Part D coverage for the first time
- Changing from one Part D plan to another
- Going back to Original Medicare from Advantage
Medicare Advantage (MA) has become increasingly popular over the years. According to the latest stats from the Centers for Medicare and Medicaid Services, nearly half (45%) of all Medicare enrollees chose private Medicare Advantage plans over traditional Medicare in 2022. Enrollment in MA plans topped 29.1 million people, compared with 35 million enrolled in Original Medicare.
You might know at this point that Medicare Advantage plans cover all the same benefits as Original Medicare – Parts A and B together – as well as additional benefits that vary by plan. Many cover prescription drugs. Some also cover things like dental, vision and hearing care, telehealth services, meal delivery, gym memberships and more.
But private Medicare plans can go beyond even these benefits. Thanks to expansions in the last few years, Medicare Advantage plans can also offer innovative benefits designed to address what are called social determinants of health. These are non-medical factors that affect your health and wellbeing. Under recent guidelines, Advantage plans might cover things to help support your health even if these benefits aren’t considered “healthcare.” One example might be an air purifier or carpet cleaning service to address air quality for people with asthma.
Medicare Advantage isn’t the only portion of Medicare that’s evolving, though. The program as a whole will see some changes starting next year.
If you have Medicare, here’s what you need to know about what’s new in 2023.
Premiums for Parts B, C and D will be a bit lower.
Last year, premiums for Medicare Part B jumped by over $20 a month, from $148.50 in 2021 to $170.10 in 2022. This was mainly due to a new drug that hit the market in the summer of 2021. With a staggering price tag and the anticipated high demand for controversial Alzheimer’s drug Aduhelm, Medicare bumped Part B premium rates to account for the drug’s usage.
Eventually, though, CMS declined to cover the drug on a broad basis. This meant it collected more in premiums than it needed to. But instead of lowering premiums in 2022, the government decided to pass along those savings to members in 2023. As a result, 2023 premiums will be lower in 2022 – but not by much.
The standard Part B premium is $164.90 a month in 2023, a difference of about $5 over last year’s cost. This is still a little over $15 more per month than the Part B premium in 2021, so on the whole, costs are rising in Original Medicare.
As a side note, the Part B annual deductible will also be slightly lower in 2023, dropping to $226, a difference of $7 over 2021.
For Medicare Part C, also known as Medicare Advantage, costs vary by plan. But CMS is projecting a lower average for 2023 over last year, with the average cost of a private Medicare plan running at about $18 a month next year.
And in Part D, which is private prescription drug coverage for people with Original Medicare, costs are also expected to be lower next year. In 2023, the average Part D premium is $31.50 a month.
Medicare will continue to cover pandemic-era cost sharing.
As we close in on a third year of a global health crisis, much of life has returned to normal for many Americans. But covid continues to linger and we’re still in a pandemic. As such, Medicare will continue to cover the cost of care related to covid. In 2023, Medicare members will pay nothing out of pocket for:
- Vaccines and booster shots
- Covid tests when ordered by a healthcare provider and administered at a lab, pharmacy, doctor or hospital
- Antibody tests
- Monoclonal antibody treatment from a Medicare provider or supplier (with certain conditions met)
Medicare will also cover up to 8 over-the-counter covid tests each month from participating pharmacies or healthcare providers under the Part B benefit. For people with Medicare Advantage, the Part B benefit should cover these tests, but check with your plan for details.
Cost sharing for adult vaccines is being eliminated.
Vaccines covered under Part B, such as flu shots, are typically covered without any cost sharing (out-of-pocket cost). But other vaccines, like the one for shingles, are a Part D benefit. And Part D plans can set their own coinsurance costs as part of their plan design. Thanks to the Inflation Reduction Act signed into law this year, though, this practice will change starting in 2023.
For plans taking effect next year and going forward, Part D will have to cover adult vaccines recommended by the Advisory Committee on Immunization Practices at no cost sharing for members. So when you go to get your shingles vaccine in 2023, you won’t have to pay anything out of pocket for it, assuming you have Part D coverage.
And cost sharing for insulin is being capped.
Speaking of limiting cost sharing, one important provision of the Inflation Reduction Act is that the cost of insulin will be capped for people with Medicare. Starting in 2023, Part D plans – standalone or as part of Medicare Advantage – can’t charge more than $35 a month for the types of insulin they cover.
Now, this doesn’t mean that every plan has to cover every insulin drug at $35 a month or less. Part D plans can still choose which forms to cover. So if you need insulin, check a plan’s formulary carefully to make sure it covers the kind of insulin you take.
A Kaiser Family Foundation analysis found that many Part D plans put insulin on tier 3 of their drug formularies, meaning high cost sharing at the pharmacy counter. The $35 cap could result in significant savings for people who need insulin.
There’s a new special enrollment period.
Unless you’re still working when you turn 65 and have health insurance through your job, the best time to enroll in Medicare is when you first become eligible. For most people, this is the initial enrollment period (IEP). It runs for 7 months: 3 months before the month you turn 65, the month you turn 65 and the 3 months following. Ex: If you turn 65 in June, your IEP runs from March 1st through September 30th.
Typically, this is the only time you can enroll in Medicare without facing a penalty for late enrollment. Outside of this window, you’d have to meet a special circumstance to avoid paying a fee on top of your Part B premium (and Part A premium, if you don’t get Part A for free).
New for 2023, CMS has added more qualifying situations that could trigger a Special Enrollment Period.
If you miss your initial signup window because of “exceptional circumstances” – such as a natural disaster, incarceration or losing Medicaid coverage – then you may be able to enroll during a special enrollment window. Contact Medicare directly for information about dates and how to do it.
Coverage start dates are now earlier (for some).
Currently, when you sign up for Medicare determines when your coverage starts. If you enroll during the first three months of eligibility, for example, then coverage starts the month you turn 65. This changes in 2023.
Starting next year, if you sign up at any point after your birth month (but still during your initial enrollment period), coverage will start on the first of the following month.
Ex: Your birthday is August 6th, which means your initial enrollment period is May 1st through November 30th. If you sign up between September and November, your coverage will start on the first of the month after the month you sign up.
For people who don’t use the initial enrollment window to sign up and enroll instead during the General Enrollment Period (January 1st through March 31st), the coverage start date will change in 2023 as well. If you use the general signup period to get Medicare for the first time, your coverage will now start on the first of the month following the month you enroll. (Before 2023, coverage didn’t start until July if you used the general enrollment period.)
ESRD patients can sign up for limited Part B coverage.
Some people only qualify for Medicare due to end-stage renal disease (ESRD). Currently, Medicare coverage ends for an ESRD patient 36 months after a successful kidney transplant. That includes coverage for immunosuppressive drugs. Starting in 2023, a new benefit is available to these patients.
If you’re eligible for Medicare because of ESRD and lose Medicare coverage because of a successful kidney transplant, you can enroll in coverage for your immunosuppressive drugs under Part B if you have no other healthcare coverage. This limited Part B coverage does not cover any other service, just the immunosuppressive drugs.
ESRD patients will pay a reduced premium for the immunosuppressive benefit. In 2023, the standard Part B premium for this limited coverage is $97.10 a month. Higher-income enrollees will pay more. If you enroll in this coverage, you’ll also still need to meet the Part B deductible first ($226 for 2023) and pay the standard 20% Part B coinsurance rate for your immunosuppressive medication.
This new benefit is available as of October 1st. If you enroll by December 31st, your coverage starts on January 1st.
Don’t forget to take a look.
With lower costs and more benefits in Medicare Advantage plans, lower insulin costs for Part D and a new benefit for ESRD patients, it’s worth a look to make sure you’ve got the right plan in place for 2023. Open Enrollment runs from October 15th through December 7th, so take the time to review your coverage for next year. Any changes you make take effect on January 1st.