While Medicare provides much needed health insurance to American seniors, it is not free. From monthly premiums, to copays, and deductibles, kupuna are always looking for the best coverage at the most reasonable price. On the cost front, there is good news for Part D prescription drug benefits coming in 2023.
Part D benefits are an important part of Medicare coverage for seniors; many of whom take one or more prescription drugs on a regular basis. Approximately 49 million Medicare beneficiaries have prescription drug coverage, either purchased as a stand-alone Part D plan alongside Original Medicare or as part of a Medicare Advantage plan that includes drug benefits. Prescription drug plans typically come with a reasonably low monthly premium, but a drop in premiums is always good news.
Cost Savings Coming to Medicare Part D in 2023
According to the Centers for Medicare & Medicaid Services, the average premiums for Medicare prescription drug coverage will decrease to about $31.50 per month in 2023 from an average of $32.08 in 2022 (higher income earners may pay more for their premiums through the income-related monthly adjustment amounts, or IRMAAs). On the other hand, the maximum deductible for Part D coverage is expected to increase from $480 this year to $505 in 2023, according to information released in April by Medicare officials. (Not all Part D plans have a deductible and many have deductibles that are smaller than the maximum allowed).
In addition to the premium reduction, the Inflation Reduction Act that was passed earlier this month includes four measures that will affect the costs of Medicare Part D benefits in a positive way:
1. The act will cap the cost of insulin for Medicare beneficiaries to $35 per month starting in 2023.
2. The federal government will now be required to negotiate prices for some high-cost drugs covered under Medicare.
3. Drug manufacturers will now be required to pay rebates to Medicare if they increase prices faster than inflation for drugs used by Medicare beneficiaries.
4. Out-of-pocket spending for Medicare Part D will be limited to $4,000 annually in 2024 by eliminating coinsurance above the catastrophic threshold and then to $2,000 annually in 2025 by adding on $2,000 cap on spending.
Finding a prescription drug plan that’s right for you
Depending on where you live and whether you choose Original Medicare or Medicare Advantage, there are many different Part D plans to choose from. While all Part D plans must cover drugs from a list of common categories, premiums, deductibles, and specific drug coverage may vary widely from plan to plan. Medicare agents can help kupuna sort through the different options and make recommendations based on individual needs and budgets. Medicare agents will also help seniors apply for the Extra Help program if they qualify as low-income/low-resource or navigate the so-called income-related monthly adjustment amounts, or IRMAAs, if they are high income earners.
Annual Notice of Change letters will be going out in September. Make sure to read them over to learn about any changes that may be coming to your Medicare plans and then schedule a call with your Medicare agent for help looking into other plan options if you are looking for a change. Kupuna will be able to enroll in or switch their Part D or Medicare Advantage plan soon during Medicare’s Annual Enrollment Period between October 15 and December 7.
Our independent insurance agents are dedicated to assisting people on Medicare and those who are ready to transition from employer coverage to personal retirement coverage. We help kupuna understand their benefits options and apply for additional coverage, as needed. Because we represent all the major Medicare Advantage and supplement plans in Hawaii, we are able to offer unbiased advice; all at no cost to our clients.
At PBC, our clients are our number one priority and we look forward to getting to know you and your needs. Call us today at (808) 738-4500 to see how we may be of assistance.