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.

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It is usually best if someone enrolls in Medicare when they are first eligible. As you mentioned, many people who delay enrolling in Medicare must wait for the General Enrollment Period and then may owe a late enrollment penalty for life.

Beginning this year, though, if someone misses a first-time enrollment period, there are certain situations when they might qualify for exceptional circumstances Special Enrollment Period (SEP).  One of these new SEPs is for people who were released from the custody of a penal authority, including a prison, after January 1, 2023.

To be eligible for this SEP, he would have to:

• Be eligible for Medicare
• Have failed to enroll in Medicare while he was incarcerated
• Be released on or after January 1, 2023

Note that Medicare defines “incarcerated” as individuals who are in the custody of certain authorities, including people under arrest, imprisoned, residing in halfway houses, living under home detention, or confined completely or partially in any way under a penal statute or rule.

• If he is eligible, the SEP lasts for twelve months.
• The SEP starts the day he was released.
• The SEP ends the last day of the twelfth month after his release.

He can choose to have his coverage begin on the first of the month after he signs up, or to have it begin up to six months retroactively (but not before January 1, 2023, or before his release ). If he uses this SEP to enroll in Medicare, he will not owe a late enrollment penalty. To use this SEP, he should contact SSA.

If he then wants to enroll in a Medicare Advantage Plan or stand-alone Part D prescription drug plan, he should contact 1-800-MEDICARE (1-800-633-4227) to learn more about his enrollment period options. He may qualify for a Medicare Advantage or Part D SEP or have other enrollment periods available, depending on when he enrolls in Part B.

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Published by: AARP

Missing deadlines, delaying enrollment, or choosing the wrong plan can cost you a bundle when it comes to Medicare. Here’s a list of 10 common mistakes new Medicare enrollees make and how to avoid them, according to the Medicare Rights Center, a nonpartisan, not-for-profit consumer service organization.

1. Not signing up for Medicare at the right time

Timing, as they say, is everything. It’s especially important when it comes to enrolling in Medicare. As you approach 65, you’ll want to enroll during what the government calls your initial enrollment period (IEP). This seven-month period goes from three months before the month in which you turn 65 until three months after.

If you don’t sign up during your IEP, you will get another chance to enroll during Medicare’s annual general enrollment period, from Jan. 1 through March 31 of each year. However, if you enroll at that time, your coverage won’t begin until July. And, because you enrolled late, your monthly premiums for Medicare Part B — which covers your doctor visits and other outpatient services—will likely cost you more. Beginning in 2023, if you enroll at any time during your initial enrollment period, a special enrollment period or during the general enrollment period, your coverage will take effect the following month. Remember, if you sign up for Part B during the general enrollment period, you’ll still be subject to that late enrollment penalty.

​A 2022 reprieve: Because the Social Security Administration (SSA), which processes Medicare enrollments and disenrollments, is experiencing problems with its phone system, if you attempted to contact the agency to enroll or disenroll from Medicare Parts A and/or B after Jan. 1, 2022, but couldn’t get through, you’ll now have until Dec. 30, 2022, to make your changes. If this applies to you, call 800-772-1213 to see if you qualify for this extension.

2. Blowing the special enrollment period

If you are 65 or older, when you stop working and lose your health insurance coverage or when the insurance you have through your spouse ends, you’ll need to sign up for Medicare. Medicare has created a special enrollment period (SEP) that lets you do that without facing a late enrollment penalty.

Again, timing is everything. What many people don’t realize is that you can only use this SEP either while you are covered by job-based insurance or for eight months after you no longer have job-based insurance.

Note: Medicare does not count retiree health insurance or COBRA as job-based coverage. So, if that’s the insurance you have, you’ll need to reread mistake number one and sign up when you turn 65 or face that late enrollment penalty.

3. Delaying enrollment when your job insurance is second in line

Even when you have job-based insurance, some employers, depending on their size, can designate Medicare as your primary health coverage when you turn 65. And if you have retiree coverage or COBRA, those are considered secondary coverage.

If your job-based or other private insurance is considered secondary coverage, it will only pay for a medical claim after Medicare has paid its share. So, if your job-related insurance becomes your secondary coverage, it’s important to sign up for Medicare. If your job-based insurance is primary, then Medicare becomes your secondary coverage.

The way to find out if your job-based insurance is considered primary or secondary is to ask your benefits manager or human resources department or seek help from 800-MEDICARE.

4. Not understanding Part B and Part D late enrollment penalties

For every 12 months you delay enrolling in Part B, your monthly Part B premium may be 10 percent higher. The penalty won’t apply if you have job-based insurance or are still under your special enrollment period.

For every 12 months you delay signing up for a Part D plan, your monthly premium may be 1 percent higher. Part D plans cover prescription drug costs. You won’t have to pay the Part D penalty if you can show Medicare that you have drug coverage as good as that provided by a Medicare Part D plan.

You should receive a letter from your employer — or insurance plan — in September of each year letting you know if you have drug coverage comparable to a Part D plan. If you lose your drug coverage, you’ll be eligible for a two-month special enrollment period, during which you can sign up for a Part D plan without a penalty. But keep that letter so you can show Medicare you did have Part D-comparable prescription drug coverage when the time comes to enroll in Part D.

Note: Usually, these penalties last for as long as you have Medicare. But if you are paying this penalty and qualify for and enroll in a Medicare Savings Program or the Extra Help program — which helps low-income older adults pay for Medicare out-of-pocket costs — you will no longer have to pay the penalty.

5. Not fully comparing original Medicare with Medicare Advantage plans

If you are eligible for Medicare, you have a choice to receive your benefits through original Medicare or a Medicare Advantage plan. The type of Medicare coverage you choose depends on factors such as your health care needs, the insurance your doctors accept, where you live, whether you travel often, and your financial situation.

Original Medicare is the traditional program offered directly through the federal government. It comprises Part A, which covers hospital costs, and Part B, which covers doctor visits and other outpatient services. The vast majority of doctors in the country take this insurance. To help pay for your out-of-pocket costs, you can buy a Medigap policy, which has its own separate monthly premium. Original Medicare does not include Part D (prescription drug coverage), so you must sign up for a stand-alone Part D plan if you do not have other drug coverage. Original Medicare does not have a limit on your annual out-of-pocket costs.

Medicare Advantage (MA) is a private insurance alternative to original Medicare. These plans provide Part A, Part B, and usually Part D benefits. They may also offer certain benefits that original Medicare does not cover, such as dental or vision care. Some MA plans may also provide some nontraditional services, such as paying for wheelchair ramps, meals delivered to beneficiaries’ homes, and transportation to medical appointments. These plans may also have different costs and rules than Original Medicare. For example, an MA plan can require you to get a referral from a primary care physician before it will cover care from a specialist. And Medicare Advantage plans generally have a network of providers in your geographic area and may not cover care if you see an out-of-network provider (except in emergencies). MA plans have an annual out-of-pocket limit, and you cannot buy a Medigap policy when you are enrolled in Medicare Advantage.

6. Delaying buying a Medigap policy

Medigaps are supplemental health insurance policies that work with original Medicare. If you have a Medigap policy, it pays part or some of the out-of-pocket costs that Medicare doesn’t cover, such as your Part A hospital deductible or the 20 percent coinsurance in Part B. Depending on where you live, you can choose from as many as 10 different Medigap plans. Each policy has a different letter name (for example, Plan A) and offers a different set of standardized benefits. Policies with the same letter name offer the same benefits, but premiums can vary from company to company.

The best time to buy a Medigap policy is during your Medigap open enrollment period. That six-month window starts when you turn 65 years old and have enrolled in Medicare Part B. It’s important to enroll then because during that time the insurance companies that sell Medigap policies cannot deny you coverage if you have a preexisting condition, and they have to sell you a plan at the best available rate. If you try to buy a plan outside of this window, companies may refuse to sell you a policy or may deny you coverage for your existing health problems.

Some states have their own rules governing Medigap policies, so if you made this mistake and didn’t sign up during your enrollment period, check with your State Health Insurance Assistance Program (SHIP) at shiptacenter.org to ask about state-specific Medigap rights.

7. Not understanding your out-of-pocket costs

Although Medicare pays the lion’s share of the medical costs for its enrollees, you need to be prepared for sometimes substantial out-of-pocket costs. Here’s a rundown:

Premium: Each part of Medicare may have its own monthly premium. Most people have no premium for Part A, which covers hospital services. You will be responsible for the Part B premium, which will be deducted from your monthly benefit if you are collecting Social Security. If you enroll in a Medicare Advantage (MA) plan or a Part D plan, you may also owe a monthly premium, depending on the plan you select.

Deductible: Before Medicare starts paying for the cost of your care, you may have to pay a flat amount, called a deductible. Parts A and B in original Medicare have annual deductibles, and some MA and Part D prescription drug plans also have deductibles. Medigap policies often cover original Medicare deductibles.

Copayment: This is a fixed amount you pay for specific services. For example, under MA plans you may have a copay — usually around $25 — every time you see a doctor or get another medical service.

Coinsurance: This is where your plan will charge you a percentage of the cost of a medical visit or service. If you have original Medicare, you will owe 20 percent of the cost of the service. So, if you get a blood test that costs $100, Medicare will pay $80 and you’ll be responsible for $20. Medigap policies also usually cover your 20 percent share.

Note: If you have original Medicare, you should make sure the health provider you see accepts Medicare and takes what is called “assignment.” That means the provider is willing to accept the amount of payment on Medicare’s fee schedule for the service they perform. If you see nonparticipating providers, they can charge you up to 15 percent more than Medicare’s approved rate. If you have an MA plan, you should try to go to a network provider because some MA plans won’t cover out-of-network care at all, and others will pay less if you go out of network.

8. Choosing a Medicare Advantage plan that doesn’t include your health care providers

Each type of Medicare Advantage plan has different network rules. Most plans are either health maintenance organizations (HMOs), which often require referrals to specialists and rely on primary care physicians to coordinate a patient’s care, or preferred provider organizations (PPOs), which have networks of doctors, hospitals, and medical facilities that contract with a plan to provide services. Your costs are typically lowest when you use in-network providers and facilities, regardless of your plan.

If you decide to enroll in an MA plan, check with your providers to learn which plans they accept. If you have questions, contact your plan for more information. If your providers are not in the plan’s network, check to see how much, if anything, the plan will pay for their services.

9. Choosing drug coverage that doesn’t fully and affordably cover your prescriptions

Whether you’re planning to get your prescriptions covered through a stand-alone Part D plan or under a Medicare Advantage plan, take some time to learn about the rules, what drugs are covered and what your costs will be.

Make sure your plan covers your needed drugs. Each Part D plan has a list of covered drugs, called a formulary. If your drug is not on your plan’s formulary, you may have to request an exception, pay out of pocket for the cost, or file an appeal.

Also, find out whether your plan places any restrictions (sometimes called utilization management strategies) on coverage. Some plans may place a restriction on a certain drug, but others may not. One restriction might be requiring you to get prior approval from the plan before it will pay for a particular drug. Another example of a coverage restriction is step therapy, which means your plan requires you to try other, less expensive drugs before it will cover a more expensive medicine that you may need.

You should also take a look at whether the plan you’re considering will give you a good deal at the pharmacy of your choice — or through mail order. Each Part D plan has a network of pharmacies that include both preferred and non-preferred pharmacies. You typically pay less for your prescriptions at preferred pharmacies.

10. Assuming you can’t afford Medicare

If you have a limited income, you may be able to get assistance with your health costs through certain programs.

Medicare Savings Programs (MSPs) help pay the monthly Part B premium and may help with Medicare cost-sharing, depending on the program (there are three types of MSPs). Contact your SHIP at shiptacenter.org to learn if you are eligible for an MSP.

Extra Help is a federal program that helps pay for some to most of the costs of Medicare Part D prescription drug coverage. Contact the Social Security Administration at 800-772-1213 or visit ssa.gov to learn if you are eligible for Extra Help and to start an application.

State Pharmaceutical Assistance Programs (SPAPs) are offered in some states to help eligible individuals pay for prescriptions. Contact your SHIP at shiptacenter.org to learn if there is an SPAP in your state.

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Medicare is not entirely free. Even if you don’t pay a monthly fee for Part A (Premium), you pay an established amount every year (Deductible) and coinsurance fees.

In addition to those charges, you will pay costs for Part B and D. You will also pay for each Medigap or Medicare  Advantage Plan you select.

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