2023 changes include premium and deductible increases for Part A, premium and deductible decreases for Part B, and Part D coverage changes due to the Inflation Reduction Act
There are a few surprises coming your way in 2023. You can expect both rate increases and decreases ahead.
Key Takeaways
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- The Centers for Medicare & MedicaidMedicaid is a public health insurance program that provides health care coverage to low-income families and individuals in the United States. Services (CMS) projects that the Part A premium, deductible, and coinsuranceCoinsurance is a percentage of the total you are required to pay for a medical service. will all increase in 2023. (The finalized Part A costs will be published in November.)
- 2023 Medicare Part BMedicare Part B is medical coverage for people with Original Medicare benefits. It covers doctor visits, preventative care, tests, durable medical equipment, and supplies. Medicare Part B pays 80 percent of most medically necessary healthcare services. premiumsA premium is an amount that an insurance policyholder must pay for coverage. Premiums are typically paid on a monthly basis. In the federal Medicare program, there are four different types of premiums. will decrease by three percent, or $5.20, going from $170.10 a month to $164.90.
- The Part B deductible will also fall from $233 in 2022 to $226 in 2023.
- The income brackets for high-income premium adjustments (IRMAAIncome Related Month Adjustment Amount (IRMAA) is a Medicare Part B and Medicare Part D premium surcharge that is levied on high-income earners. The surcharge amount is based on a beneficiary's adjusted gross income.) for Medicare Part B and D are expected to increase in 2023. (The current standard base income bracket is $91,000. The new proposed standard income bracket is $97,000.)
- The 2023 maximum out-of-pocket limit (MOOP) for Medicare Advantage plansMedicare Advantage (MA), also known as Medicare Part C, are health plans from private insurance companies that are available to people eligible for Original Medicare (Medicare Part A and Medicare Part B). is increasing to $8,300, up from $7,550 in 2022.
- A standard Medicare Part DMedicare Part D plans are an option Medicare beneficiaries can use to get prescription drug coverage. Part D plans provide cost-sharing on covered medications in four different phases: deductible, initial coverage, coverage gap, and catastrophic. Each... plan’s maximum deductible is increasing to $505 in 2023, up from $480 in 2022.
- The spending threshold for entering the Medicare Part D catastrophic coverage phase is increasing to $7,400 in 2023.
- The recently signed Inflation Reduction Act will improve Part D by making sure Part D plan members no longer pay for covered vaccines. It also makes permanent Part D Senior Savings Model, which guarantees access to insulin for no more than $35 per month.
- The Medicare Annual Enrollment PeriodThe Annual Enrollment Period is when Medicare beneficiaries can join, drop or change Medicare Advantage and Medicare Part D prescription drug plans. AEP begins on 15 October and ends on 7 December. (AEP) starts each year on October 15 and ends on December 7.
- AEP only applies to Medicare Advantage plans and Medicare Part D plans.
- Any changes you make during AEP will take effect on January 1.
- In most cases, AEP is the only time you can pick a new Medicare Advantage or Part D prescription drug plan. If you make a mistake, you can switch plans during the Medicare Advantage Open Enrollment PeriodDuring the Medicare Open Enrollment Period, Medicare Advantage and Part D plan members can change, switch, or drop a plan they chose during the Annual Election Period. OEP starts on January 1 and ends on March 31. ( January 1 – March 31 ).
- If you have Medicare Advantage, you can switch back to Original MedicareOriginal Medicare is private fee-for-service health insurance for people on Medicare. It has two parts. Part A is hospital coverage. Part B is medical coverage. during AEP. Depending on your state laws, you may be able to buy a Medigap plan, which helps pay deductiblesA deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share. and coinsurance costs in Original Medicare. Limitations apply as to who can buy a Medigap policy with guaranteed-issue rightsGuaranteed-issue is a right granted to Medicare beneficiaries and applies to Medicare Supplement insurance (aka, Medigap plans). All states and the federal government enforce this essential right, which protects Medicare beneficiaries from medical underwriting..
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There are several important changes for Medicare beneficiaries in 2023. The biggest changes are happening to Medicare Advantage and Medicare Part D plans in 2023. Enrollment in these plans begins October 15. However, there are also changes to Original Medicare, including cost-sharing, premiums, the Income Related Monthly Adjustment Amount (IRMAA) brackets, and more.
2023 Medicare Part A Premiums, Deductible, and Coinsurance
Medicare Part AMedicare Part A is hospital coverage for Medicare beneficiaries. It covers inpatient care in hospitals and skilled nursing facilities. It also covers limited home healthcare services and hospice care. covers a beneficiary’s inpatient costs. Part A has out-of-pocket costsOut-of-Pocket Costs for Medicare are the remaining costs that are not covered by the beneficiary's health insurance plan. These costs can come from the beneficiary's monthly premiums, deductibles, coinsurance, and copayments. (deductibles and co-insurance) when a beneficiaryA person who has health care insurance through the Medicare or Medicaid programs. needs to be hospitalized, however, most people don’t pay a monthly Part A premium. Beneficiaries who did not pay the minimum 40-quarters of Medicare payroll taxes pay a monthly premium based on the number of quarters they paid Medicare taxes.
Are Medicare Part A Premiums Increasing in 2023?
Premiums for people with less than 40 quarters of Medicare tax payments increased in 2022 and are expected to increase again in 2023. The final number will be announced by CMS in November.
Is The Medicare Part A Deductible Increasing in 2023?
Yes, CMS reports the Part A benefit periodA benefit period is a method used in Original Medicare to measure a beneficiaries use of hospital and skilled nursing facility (SNF) services. With each new benefit period, the beneficiary is charged a new benefit... deductible will increase in 2023. The finalized amount will be published in November.
Is The Medicare Part A Coinsurance Increasing in 2023?
Yes, CMS reports the Part A coinsurance will increase in 2023. The finalized amount will be published in November.
2023 Medicare Part B Premiums and Deductible
Medicare Part B covers a beneficiary’s medical costs from doctors, specialists, labs, and other medical professions. Unlike Part A, all beneficiaries pay a monthly premium (even if they receive premium assistance), and beneficiaries who remain in Original Medicare pay the annual Part B deductible and coinsurance when they use approved services.
Are Medicare Part B Premiums Increasing in 2023?
Surprise! Part B premiums are decreasing!
In a rare move, the Centers for Medicare & Medicaid Services reported that Medicare Part B premiums will decrease in 2023. The last time this happened was in 2012 when rates dropped by over 13 percent. The standard premium will drop by three percent, going from $170.10 a month in 2022 to $164.90 a month starting January 2023.
Is The Medicare Part B Deductible Increasing in 2023?
Like the standard premium, the 2023 Part B deductible will also decrease in 2023, going from $233 to $226.
Are Medicare Supplement Plan F and Plan C Still Available in 2023?
If you remain in Original Medicare, and you do not have additional coverage from an employer, retiree benefits, the Veterans Administration, or state Medicaid, additional insurance is highly recommended. That’s where a Medicare supplementMedicare Supplements are additional insurance policies that Medicare beneficiaries can purchase to cover the gaps in their Original Medicare (Medicare Part A and Medicare Part B) health insurance coverage. (aka, Medigap) plan comes in. These plans cover some or all of the out-of-pocket costs built into Medicare Part A and Part B.
Until recently, the most popular Medigap policy was Plan F. That’s because it covers all Part A and Part B out-of-pocket costs. People with a Plan F policy have first-dollar coverage. Plus, they’re covered for foreign travel emergencies, too.
Unfortunately, Congress passed a law (Medicare Access and CHIP Reauthorization Act of 2015) that no longer allows insurance carriers to offer Medigap policies that cover the Part B deductible, which includes Medigap Plan FMedicare Supplement Plan F is the most comprehensive Medicare supplement plan available. This plan covers all Original Medicare deductibles, coinsurance, and copayments, leaving you with no out-of-pocket costs on all Medicare-approved services. and Medigap Plan CMedicare Supplement Plan C, also called Medigap Plan C, is one of the most comprehensive of the 10 standardized supplemental Medicare plans available in most states. In fact, only Medicare Plan F offers more coverage.. If you have one of these plans you can keep it. However, anyone who qualified for Medicare on or after January 1, 2020, can no longer get one of these plans. If you qualified for Medicare on or after January 1, 2020, the best plan you can get is Medigap Plan GIf you're turning age 65 this year, Medicare Supplement Plan G is the most comprehensive Medicare supplement you can buy. It's also the most popular. You might be thinking that Medicare Supplement Plan F is....
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Will The Income-Related Monthly Adjustment (IRMAA) Amounts Increase in 2023?
IRMAA is an Obamacare-era tax on high-income earners. It allows Medicare to charge high-income earners more for their monthly Medicare Part B and Part D premiums.
IRMAA has several high-income brackets. In 2023, due to the exceptionally high rate of inflation, the standard income bracket is expected to increase from $91,000 to $97,000 for an individual. The high-income brackets will be published by November.
People paying IRMAA taxes on their Part B and Part D premiums should expect an increase in 2023. The rates will be announced by CMS in November.
How Much Are Medicare Advantage Premiums Increasing in 2023?
The average Medicare Advantage premiums have been decreasing for several years. The average 2022 plan premium is a little more than $19 per month, which does not include the monthly Part B premium. Average Medicare Advantage premium will not be known until the new plan information is published in early October.
Are There Free Medicare Advantage Plans in 2023?
It’s a bit of a myth that some Medicare Advantage plans are free. While many Medicare Advantage plans have a zero-dollar monthly premium, members continue to pay their monthly Medicare Part B premiumThe Medicare Part B premium is the monthly charge paid by beneficiaries for their outpatient medical care, services, and supplies. A beneficiary's premium may be uplifted by an IRMAA surcharge if their income is above.... Plus, all standard Medicare Advantage plans have copays and other out-of-pocket costs.
The good news is that the number of Medicare Advantage Special Needs Plans (SNPs) has grown rapidly over the past few years, and growth is expected to continue. That’s good news because the number of adults ages 65 and over who fell into poverty last year exceeded one million, and the need for dual-eligibleDual-eligible beneficiaries are those who receive both Medicare and Medicaid benefits. It includes beneficiaries enrolled in Medicare Part A and/or Part B while receiving full Medicaid and/or financial assistance through a Medicare Savings Program.... SNP plans (D-SNP) is greater than ever.
A D-SNP plan is about as close as you can get to a “FREE” Medicare Advantage plan. If you, or someone you know, qualifies for both Medicare and Medicaid benefits, due to income, check out dual-eligible Special Needs Plans in your area. Most costs are covered, including prescriptions.
Is The Medicare Advantage Maximum Out-Of-Pocket Limit Changing in 2023?
Yes! Unfortunately, the maximum out-of-pocket (MOOP) limit for Medicare Advantage plans is increasing from $7,550 in 2022 to $8,300 in 2023. That’s a big jump, but most plans are expected to have a lower limit.
If you are in an area with a lot of plan options, you can expect to see much lower MOOPs as the competition heats up. Over the past couple of years, we’ve seen areas like Los Angeles County, California with MOOPs below $1,000 per year.
Unfortunately, many rural areas, which often have fewer choices, frequently have the highest MOOP limits. If you live in a rural area, and all of your Medicare Advantage options have a high MOOP, you might want to consider keeping Original Medicare and adding a Medigap policy. Let’s face it, $8,300 in annual out-of-pocket costs pays a lot of monthly Medigap premiums. Let us send you a FREE Medigap Rate Analysis.
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Are The Medicare Part D Deductible and True Out-Of-Pocket Threshold Changing in 2023?
We have good news and bad news about Medicare Part D for 2023.
The good news is that the Part D Senior Savings Model, which started as a demonstration project a couple of years ago, is now permanent. Under the Senior Savings Model, participating plans capped the cost of insulin at no more than $35 per month. This was a very successful program, and we’re happy to see it roll out to all plans in 2023.
Another bit of good news is that Medicare Part D enrollees will now receive all recommended vaccines at no cost. Yep, they’ll be free, thanks to the Inflation Reduction Act! But, that’s the only good news.
The Part D catastrophic coverage out-of-pocket threshold is increasing to $7,400 in 2023, up from $7,050 in 2022. Plus, the copaymentA copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service. amounts for people in the catastrophic coverage phase are increasing to $4.15 for generics and $10.35 for brand-name drugs.
The maximum annual deductible for 2023 Medicare Part D plans is also increasing. The maximum allowable deductible is increasing to $505, up from $480 in 2022.