Every year, Medicare announces a list of new updates to the insurance program. The updates might seem trivial and minor, but they can significantly impact enrollees’ finances and coverage.
Enrollees need to keep a close eye on the annual Medicare updates.
Historically, Medicare changes usually expand the program, but changes also involve the amount you pay in premiums, deductibles, and coinsurance – some go up, some go down.
So, what are the Medicare changes in 2023?
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Medicare Part A Changes 2023
Medicare Part A is free coverage, often referred to as ‘hospital insurance. The plan provides coverage for inpatient care during hospital admittance, skilled nursing facilities, and home health care in specific scenarios.
When an individual turns 65, Medicare Part A eligibility is automatic. No premium is paid unless they have less than 40 quarters – equal to about ten years – of work history (1% of enrollees).
Although most Americans do not pay a premium for Part A, out-of-pocket costs must be paid when care is needed.
Part A Premiums in 2023
The Part A premium sees a slight change yearly for those who do not have 40 quarters of work history. As usual, the premium will depend on how long they or their spouse has worked and paid Medicare taxes.
Currently, the Part A premium for individuals between 30 and 40 quarters of work history pays $278 per month; for those with less than 30 quarters of work history, the premium is $506 per month.
Part A Deductible in 2023
Part A deductible applies to each benefit period and can be necessary more than once per year. The deductible generally increases each year. As reported by the CMS, in 2023, the inpatient hospital deductible amount for Medicare Part A that beneficiaries pay if admitted will be $1,600 in 2023, an increase of $44 from $1,556 in 2022. This increase applies to all enrollees, although many may have supplemental coverage that pays for the cost.
Part A Coinsurance in 2023
Part A deductible only covers the first 60 inpatient days. Patients will incur a daily coinsurance charge if additional inpatient coverage is required. The current costs as reported by the CMS are as follows:
| Part A Deductible and Coinsurance Amounts for Calendar Years 2022 and 2023
by Type of Cost Sharing |
||
| 2022 | 2023 | |
| Inpatient hospital deductible | $1,556 | $1,600 |
| Daily coinsurance for 61st-90th Day | $389 | $400 |
| Daily coinsurance for lifetime reserve days | $778 | $800 |
| Skilled Nursing Facility coinsurance | $194.50 | $200.00 |
Medicare Part B Changes for 2023
Unlike Medicare Part A, Medicare Part B requires a monthly premium – an amount that is automatically deducted from an individual’s benefit payment. In addition, Part B covers outpatient hospital services (X-rays, diagnostic tests, medical supplies), physician fees, certain home health services, and other medical services not covered by Part A.
In 2022, there were significant changes to both Part B premiums and deductibles. However, in 2023, the standard premium will decrease to $164.90 a month, a decline of about 3% from last year. This will save beneficiaries roughly $62 a year.
The annual deductible will also decrease slightly to $226, $7 lower than the annual deductible in 2022.
Another major change is that kidney transplant recipients will be eligible to keep limited Part B coverage for life to cover immunosuppressive drugs, with full Part B ending 36 months post-transplant.
Part B Premiums in 2023
The standard Part B premium sees a natural change every January. The increase or decrease is often in accordance with the Social Security cost of living adjustment.
According to the CMS, the standard monthly premium for Medicare Part B enrollees will be $164.90 for 2023, a decrease of $5.20 a month.
| Full Part B Coverage | |||
| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Income-Related Monthly Adjustment Amount | Total Monthly
Premium Amount |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 | $164.90 |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | $65.90 | $230.80 |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | $164.80 | $329.70 |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | $263.70 | $428.60 |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | $362.60 | $527.50 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | $395.60 | $560.50 |
Part B Deductible in 2023
The annual deductible for all Medicare Part B beneficiaries is $226 in 2023, a decrease of $7 from the annual deductible in 2022. Once this deductible is met, enrollees typically pay 20% of covered services.
There’s no yearly limit on what you pay out-of-pocket. However, it’s worth noting that supplemental coverage is available to pay for Part B deductibles. This coverage includes Medicaid, employer-sponsored plans, and Medigap plans C and F.
Medicare Part D Changes 2023
Medicare Part D is a program introduced by the federal government to get Medicare beneficiaries prescription drug coverage. Part D plans are run by private insurance companies that follow the rules set by Medicare.
You should consider getting Medicare drug coverage even if you don’t currently take prescription drugs. You may need to pay a late enrollment penalty if you decide to purchase the plan after eligibility.
Part D Premiums in 2023
Naturally, Part D premiums vary from plan to plan as private insurers sell them. According to the latest reports from CMS, “around two-thirds of beneficiaries pay premiums directly to the plan, while the remaining beneficiaries have their premiums deducted from their Social Security benefit checks.”
Regardless of how a beneficiary pays their Part D premium, the Part D income-related monthly adjustment amounts are either deducted from your Social Security benefit checks or paid directly to Medicare.
The 2023 Part D income-related monthly adjustment amounts for high-income beneficiaries are as follows:
| Beneficiaries who file individual tax returns with modified adjusted gross income: | Beneficiaries who file joint tax returns with modified adjusted gross income: | Income-related monthly adjustment amount |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 |
| Greater than $97,000 and less than or equal to $123,000 | Greater than $194,000 and less than or equal to $246,000 | 12.20 |
| Greater than $123,000 and less than or equal to $153,000 | Greater than $246,000 and less than or equal to $306,000 | 31.50 |
| Greater than $153,000 and less than or equal to $183,000 | Greater than $306,000 and less than or equal to $366,000 | 50.70 |
| Greater than $183,000 and less than $500,000 | Greater than $366,000 and less than $750,000 | 70.00 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | 76.40 |
And while not every coverage requires deductible payments, in 2023, the maximum it can be is $505, up from $480. (source)
According to the KFF, the beneficiary out-of-pocket spending at the catastrophic coverage threshold is estimated to increase from $3,000 in 2022 to approximately $3,100 in 2023 and $3,250 in 2024. Note that this cost is solely based on current estimates. (source)
Insulin costs will be capped at $35 a month.
The Inflation Reduction Act (IRA) is new legislation that will cap the cost of insulin at $35 per month for all Part D plans. This is a significant victory for people with diabetes, as the cost of insulin has been increasing at an alarming rate in recent years.
1.7 million Medicare Part D enrollees use insulin and spend an average of $54 per prescription, though some paid over $100 a month in 2020.
Recommended vaccines will be free.
The passage of the Inflation Reduction Act ensures that Medicare Part D plans must cover ACIP-recommended vaccines without any cost-sharing, starting in 2023. Patients will no longer worry about paying for these necessary preventive measures. This huge victory for public health will help ensure more people receive the recommended vaccinations. Hopefully, this will help reduce the incidence of vaccine-preventable illnesses in the United States.
Part D Donut Hole And Maximum Deductibles
While the donut hole no longer exists in 2023, the maximum deductible will increase to $505, and the threshold for entering the catastrophic coverage phase will increase to $7,400.
Changes to Medicare Supplement Plans (Medigap) 2023
Over 29 million people had Medicare Advantage plans in 2022, and that number is expected to rise this year.
Medicare Advantage plans offer significant savings on prescription drugs and free benefits such as dental, hearing/vision etc. Because of this, many Americans are turning to these plans to cover the cost of their medical needs.
The number of Medicare beneficiaries who enroll in private health plans has increased by more than 15% over the past decade, and this trend will continue as long as it remains available. In 2004 just 13 percent were enrolled in Advantage plan coverage; however, by 2012, that figure had risen to 46%.
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