How Medicare Is Changing in 2023 – ThinkAdvisor

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How Medicare Is Changing in 2023
Life Health > Health Insurance > Medicare Planning
By Craig Sturgill

There are lots of changes are coming to Medicare starting in 2023.
Some items are the result of the typical pricing changes that occur annually.
However, some significant changes are on the horizon, thanks to Inflation Reductions Act components that aim to lower prescription costs.
Adjustments will increase some Medicare premium and deductible amounts, but the Medicare Part B premium is falling.
If you help clients choose and use their Medicare coverage, you likely know all of this.
If you are not a Medicare advisor yourself, you should still understand the basics, because Medicare is such an important part of the lives of older clients.
Premiums
Most Medicare beneficiaries will get Medicare Part A coverage, or coverage for inpatient hospital care, without making premium payments.
Typical clients will get premium-free Part A coverage because they have paid Medicare taxes for 40 or more quarters, or at least 10 years.
However, some individuals must pay a premium for Medicare Part A.
For those who worked fewer than 30 quarters, the monthly premium will be $506.
For those who worked 30 to 39 quarters, the monthly premium will be $278
Deductible and Copayment Costs
When clients are admitted to the hospital, the per-occurrence deductible applies.
For 2023, the Part A deductible has increased to $1,600.
That deductible applies for each hospital admission.
Once the deductible is met, the first 60 days of coverage comes at no additional cost.
If clients are in the hospital for more than 60 days, the following out-of-pocket cost rules apply:
After 120 days, clients start using their lifetime inpatient days.
Once clients’ 60 lifetime reserve days are exhausted, they’re responsible for all costs.
However, the average hospital stay is three days.
If clients move to a skilled nursing facility, since the deductible was met at admission, there will be no charge for the first 20 days.
After 20 days, the client is responsible for a $200 copay for up to 100 days.
After 100 days, the client is responsible for all costs.
Premiums
Medicare Part B covers outpatient and medical provider services.
Medicare Part B enrollees faced one of the most significant premium increases ever between 2021 and 2022. The increase was related to the cost of a medication that had its cost slashed after 2022 Medicare prices were announced.
In 2023, Medicare program managers will lower the Part B premium from $170.10 to $164.90.
Deductible and Coinsurance Costs
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Medicare Part B out-of-pocket cost rules work differently than Medicare Part A cost-sharing requirements.
This program will have a small, $226 annual deductible in 2023.
Once this deductible is satisfied, the beneficiary is responsible for 20% of the Medicare-approved amount and any applicable excess charges.
The best known Medicare Part C program is the Medicare Advantage program.
From the perspective of your client, it combines the Original Medicare benefits into one program.
Medicare Advantage plans can also include Medicare prescription drug coverage and additional benefits, such as coverage for dental, vision, hearing, gym memberships, and over-the-counter benefits.
While many areas have Medicare Advantage plans with premiums as low as $0 monthly, the average cost for a Part C plan is $18 per month.
Another way to get Medicare prescription drug coverage is to enroll in a stand-alone Medicare Part D drug plan.
Part D drug plan costs and lists of covered drugs vary.
The average price of a Part D plan in 2023 will be $31.50.
The maximum Part D deductible has increased to $505.
Higher-income Medicare beneficiaries pay higher premiums for their Medicare Part B and Part D coverage.
The IRMAA adjustments are based on the previous two years’ tax returns and are calculated using an individual’s or household’s modified adjusted gross income.
The starting income for the IRMAA adjustment in 2023 will be $97,000 for individuals and $194,00 for couples that file joint tax returns.
The new Inflation Reduction Act (IRA) will affect drug prices in 2023.
One portion that begins early is a provision limiting insulin costs to $35 for a monthly supply of insulin, whether the insulin is covered by Medicare Part B or Medicare Part D.
The IRA also removed a non-interference provision that made it illegal for the federal government to negotiate drug costs.
Starting in 2023, Medicare program managers can negotiate the price of 10 of the most costly Medicare-covered drugs.
For a drug to be subject to price negotiations, it have no competitors, and it must have been on the FDA’s approved list for a minimum of nine years.
As mentioned above, many changes are occurring in 2023.
The changes that will have the most impact on Medicare beneficiaries will be the decrease in Part B premium, the cost reductions on insulin, and the increase in the deductibles.
Knowing the changes that are taking place in 2023 will help you help all clients with Medicare make educated choices about their coverage options and other financial matters.
Craig Sturgill. (Photo: Excel)Craig Sturgill is the co-founder of and chief operating officer at Excel Impact, an insurance marketing firm that helps Medicare plan advisors get leads.
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(Image: CMS)
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