The new year brings a cap on insulin copays, free vaccines, lower premiums, and more
Published by: AARP
Some of the biggest changes to Medicare in years take effect in 2023, with more than 65 million Americans paying lower premiums and deductibles and about to feel the effects of landmark legislation designed to bring down the runaway cost of prescription drugs.
Here’s a closer look at the biggest changes coming to Medicare in 2023.
For most Medicare beneficiaries, Part B premiums are deducted directly from their monthly Social Security payments. With Social Security’s cost-of-living adjustment (COLA) increasing benefits by 8.7 percent in 2023, Americans who are enrolled in both programs will see more money in their pockets each month.
The higher monthly charges paid by 7 percent of Medicare beneficiaries with high incomes also will decline in 2023. Part B beneficiaries with annual incomes greater than $97,000 will pay more than the standard premium — exactly how much more will depend on their income. For example, someone filing an individual tax return whose income is between $97,000 and $123,000 will pay $230.80 a month for Part B. Premiums for high-income beneficiaries start at $238.10 in 2022.
Enrollment in Medicare Advantage (MA), the private health insurance alternative to original Medicare, is likely to continue growing in 2023. Experts expect half of all Medicare enrollees to select an MA plan for the new year. Most Medicare enrollees must pay the Part B premium whether they have original Medicare or an MA plan. Some of these private plans do offer a “giveback” benefit in which the insurer covers part or all of a member’s Part B monthly premium.
Deductibles also going down
The annual Part B deductible for 2023 is decreasing to $226, a $7 decline from 2022 and the first drop in a decade.
Annual deductibles in Medicare Advantage plans and stand-alone Part D prescription drug plans vary by what plan you pick and where you live. The government does set a limit on Part D deductibles. That limit is $505 for 2023, compared with $480 in 2022.
Part A costs increasing
A fixed cost in Medicare that is going up is the Part A deductible. While most Medicare enrollees do not pay a monthly premium for Part A, which covers inpatient hospitals, skilled nursing facilities, hospice, and some home healthcare services, a deductible is charged for each hospital stay.
For 2023, the Part A deductible will be $1,600 per stay, an increase of $44 from 2022. For those people who have not worked long enough to qualify for premium-free Part A, the monthly premium will also rise. The full Part A premium will be $506 a month in 2023, a $7 increase. Whether a beneficiary must pay the full Part A premium depends on their or their spouse’s work history. Beneficiaries with Medicare Advantage plans should check with their plan for hospital charges.
Insulin copays capped
Under the Inflation Reduction Act of 2022, which includes several provisions to lower the prices of prescription drugs for Medicare beneficiaries, beginning in 2023 copays for a 30-day supply of any insulin that a Medicare drug plan covers will be capped at $35. Enrollees won’t have to pay more than $35 even if they have not yet met their annual Part D deductible. Note that not every plan covers every type of insulin.
Free vaccines
Also under the new law, vaccines recommended for adults by the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) will be available to Medicare recipients with prescription drug coverage free of charge.
Drugmakers face penalties for high price hikes
Another provision of the new law that will be fully effective in 2023 requires pharmaceutical manufacturers to pay a rebate to Medicare if they raise the prices of their drugs more than the rate of general inflation.
Beginnings of price negotiations
By Sept. 1, Medicare will announce the first 10 Part D drugs that under the new law will begin a first-ever process in which Medicare will negotiate prices with drugmakers, Seshamani said, and that “will have a huge impact for providing more affordability for drugs for people with Medicare.”
Enrollment access improved
Beginning in January, as long as people eligible for Medicare enroll during official enrollment periods, they won’t have to wait for their coverage to take effect. Also under a new federal regulation, more special enrollment windows have been established, including for people who, through no fault of their own, didn’t sign up when they were first eligible.