Medicare, the cornerstone of healthcare for millions of Americans aged 65 and older, continues to evolve to meet the changing needs of its beneficiaries.
In 2022, a significant milestone was reached with the passage of six key Medicare reforms aimed at addressing the pressing issues surrounding healthcare affordability and access. These reforms signal a shift towards ensuring that healthcare, particularly prescription medications, remains accessible and affordable for those who need it the most.
No Cost Vaccines
Starting on January 1, 2023, Medicare has eliminated A deductible is an amount a beneficiary must pay for their health care expenses before the health insurance policy begins to pay its share., Coinsurance is a percentage of the total you are required to pay for a medical service. , or any other cost-sharing obligations for adult vaccines that align with the recommendations of the Centers for Disease Control and Prevention (CDC)’s Advisory Committee on Immunization Practices. This includes all Part D plans, Medicare 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)., and vaccines administered in doctors’ offices and covered by Medicare 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..
This change encompasses vaccines such as the shingles vaccine. For a comprehensive list of the vaccines covered under this policy, refer to the CDC’s vaccine recommendation webpage.
Insulin Copay Cap
Effective from January 1, 2023, a groundbreaking change took place in Medicare’s approach to insulin coverage. Part D plans and Medicare Advantage plans now limit cost-sharing for insulin products to a maximum of $35 per month.
This cap applies to all Medicare beneficiaries, eliminating deductibles for insulin under both Part D and Part B. Additionally, Medicare initiated a Special Enrollment Periods (SEPs) allow beneficiaries to change their Medicare Advantage and Part D plans due to a special circumstance. Common reasons for a SEP include moving, losing employer coverage, and Medicaid eligibility, to name... allowing individuals using covered insulin products to make one change to their Part D coverage between now and December 31, 2023.
This initiative not only makes insulin more affordable but also provides flexibility to beneficiaries. It’s important to note that plans are not required to cover all brands and types of insulin.
Medicare Part D now covers:
- Injectable insulin not used with a traditional insulin pump
- Insulin used with a disposable insulin pump
- Certain medical supplies used to inject insulin, such as syringes, gauze, and alcohol swabs.
Medicare Part B Updates
As of July 1, 2023, cost-sharing for insulin through a traditional insulin pump has been limited to no more than $35 per month for people with Medicare Part B and Medicare Advantage who get their insulin through a traditional insulin pump.
Medicare Part B excludes coverage for:
- Insulin pens
- Syringes, needles, alcohol swabs, and gauze
However, when it comes to insulin used with a traditional pump covered under the Medicare Durable medical equipment (DME) is equipment that is designed to last and can be used repeatedly. It is suitable for home use and includes wheelchairs, oxygen equipment, and hospital beds. benefit, you will be responsible for 20 percent of the A Medicare-approved amount is what Medicare will pay for a covered service. Healthcare providers that agree to Medicare assignment accept the approved amount without excess charges. What Does Medicare-Approved Amount Mean? A Medicare-approved amount is... after you meet the Part B deductible. As for insulin-related supplies, they are typically not covered under Part B, and you would need Part D for coverage.
It’s important to note that this reform pertaining to insulin also extends to individuals enrolled in the federal Extra Help program. To gain a more comprehensive understanding of Medicare’s insulin coverage, you can explore additional information on Medicare.gov the topic.
Expansion of the “Extra Help” Low-Income Subsidy
Starting in 2024, the Social Security's Low-Income Subsidy (LIS) program helps Medicare beneficiaries pay for their Medicare Part D prescription drugs by paying some of the costs. Also known as "Extra Help", beneficiaries who qualify for LIS receive premium... program will transition to a full benefits program, eliminating the partial program. This change opens the door to comprehensive assistance for individuals with Medicare who have limited resources and incomes up to 150 percent of the federal poverty level, which for 2023 stands at $21,870 per year for an individual.
With full benefits, the majority, if not all, of the Out-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. for prescription medications will be covered. Beneficiaries who qualify for Extra Help can anticipate the following advantages:
- No deductible
- No premium
- Fixed lower A copayment, also known as a copay, is a set dollar amount you are required to pay for a medical service. for specific medications
If your income falls below $22,000 for individuals (or $30,000 for married couples) in 2023, you may be eligible for reduced prescription drug costs. Remarkably, many individuals meet the criteria for “Extra Help” with their Medicare Part D (drug coverage) without realizing it.
For a swift determination of your eligibility for Extra Help, Medicare.gov offers a helpful resource to guide you through the process. You can enroll in Extra Help by visiting SSA online at ssa.gov/extrahelp or call Social Security at 800-772-1213.
Out-of-Pocket Prescription Drug Costs After Reforms
In 2024, after paying the initial deductible, a person on Medicare will pay 25 percent of drug costs. They will have a cap of about $3,250 and will no longer pay five percent of drug costs in the catastrophic phase.
In 2025, after paying the initial deductible, a person on Medicare will pay 25 percent of drug costs. They will not spend more than $2,000 a year in out-of-pocket costs for their prescription medications. (The annual cap amount will be adjusted based on inflation in the years that follow.)
Smoothing Out-of-Pocket Costs: An Innovative Approach
Starting in 2025, every Medicare prescription drug plan, including Medicare Advantage plans with drug prescription programs, must offer patients the option to pay for their out-of-pocket prescription costs in monthly installments, with a monthly limit on spending. This approach, known as “smoothing,” aims to evenly distribute costs throughout the year.
Importantly, smoothing applies only to out-of-pocket costs for prescription medications and does not include A 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. . The opportunity to enroll in smoothing is not income-based. All Medicare 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... must offer enrollees the option to pay in monthly installments. The patient’s Part D plan or Medicare Advantage drug plan will track costs and determine when the cap has been met.
Once a patient is enrolled in smoothing, their monthly payment will be determined based on their out-of-pocket costs and the remaining months in the year. This approach ensures that individuals can better budget for their prescription medications, especially as they approach the annual cap of $2,000 in 2025.
Medication Choice Unaffected by Reforms
It’s essential to understand that these Medicare reforms, including the Part D cap and smoothing, apply to all medications covered by the Medicare program, regardless of whether they are on specialty tiers. No drugs are excluded from these reforms, ensuring that beneficiaries do not have to change their medications to benefit from the Part D cap and smoothing. This emphasizes that the choice of medication remains a collaborative decision between you and your healthcare provider.
In conclusion, the latest Medicare reforms make healthcare, particularly prescription medications, more accessible and affordable for beneficiaries. These reforms address issues ranging from insulin affordability to out-of-pocket cost management through innovative approaches like smoothing.
Importantly, these changes emphasize that medication choices remain in the hands of patients and their healthcare providers, ensuring that healthcare decisions are made in the best interest of the individual. As these reforms roll out, beneficiaries can look forward to a more financially secure and accessible Medicare landscape.
These modifications will not change an individual’s existing Medicare enrollment and should not influence their decisions during the During 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.. We strongly advise individuals to opt for plans that best meet their current prescription and medical requirements.
It’s essential to understand that the latest Medicare reforms encompass all Part D plans and Medicare Part C is Medicare's private health plan option. Also known as Medicare Advantage, Medicare Part C plans are a type of Medicare health plan offered by companies that contract with Medicare to provide all... or Medicare Advantage plans that include prescription drug coverage. However, it’s important to note that these reforms do not pertain to supplemental insurance or Medicare 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. plans.