Changes are coming to Medicare for 2023. Each year the Centers for Medicare & Medicaid Services reviews the spending and costs associated with Medicare, and these costs are reviewed and updated annually.
Below, we’ll cover all you need to know about the Medicare changes for 2023.
Medicare’s costs and premiums will be updated, as usual. However, some additional changes are occurring for 2023 thanks to implementing the Inflation Reduction Act (IRA).
While all aspects of the IRA go into effect over the course of several years, there are a few aspects that will impact Medicare beneficiaries next year.
Over time, the IRA will eliminate the donut hole and limit the total amount a beneficiary can spend on prescription drugs annually to $2,000.
The changes that will impact 2023 are limiting Insulin costs to $35 for a month's supply and removing the non-interference provision that bans the Federal Government from negotiating drug prices.
Removing the provision will allow the Secretary of Health and Human Services to start negotiating the prices for the ten most expensive Medicare-covered medications.
Most costs from Medicare Part A will increase next year.
Below is a list of Part A costs that are increasing and what the amounts are.
In contrast, to Medicare Part A, Medicare Part B’s cost has actually decreased. This decrease is partly because last year's significant increase was due to an Alzheimer's drug covered under Medicare Part B that was projected to cost twice as much as it did.
Here are the Medicare Part B costs for next year.
This part of Medicare provides an alternative way for beneficiaries to receive their Medicare benefits. These Medicare Advantage plans have their own terms and conditions, and their out-of-pocket costs vary based on the insurance company's decisions.
The Average cost of a Medicare Advantage plan next year will lower from $19 to $18/month.
Part D is how you get coverage for prescription medications filled at the pharmacy.
These plans follow a standard model, and the expenses for next year will be as follows.
Higher-income Medicare beneficiaries may have to pay a surcharge on top of the Medicare Parts B and D premiums. This additional premium is the modified adjusted gross income and is tied to the tax returns from the previous two years.
The IRMAA affects beneficiaries making $97,000+ for those filing taxes as individuals and $194,000+ for those filing joint taxes.
Since most Medicare beneficiaries are enrolled in a Medicare Supplement of Medicare Advantage plan, the increase to Part A won’t impact most. However, most Medicare beneficiaries will benefit from lowering the Medicare Part B premium and deductible. In addition, the capping of insulin costs will significantly affect many Medicare beneficiaries.