Medicare Changes 2023

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Every year, the Centers for Medicare and Medicaid Services (CMS) announce changes to the Medicare system, including changes to premiums, coverage, deductibles, and coinsurance amounts.

CMS has announced that standard premiums for Medicare Part B (most outpatient coverage), which almost everyone on Medicare pays, will be $164.90, a $5.20 decrease from $170.10 in 2022.

Keep reading to learn about other changes, including lower Part B deductibles, and higher Part A deductibles, as well as more about the Part D donut hole.

If you qualify for Medicare and are ready to look at plans, eHealth Medicare, an independent insurance broker and partner of Investopedia, has licensed insurance agents at <833-970-1255 TTY 711> who can help connect you with Medicare Advantage, Medicare Supplement Insurance, and Prescription Drug Part D plans.

Medicare Part A

Medicare Part A covers inpatient hospital, skilled nursing facility, and some home healthcare services and is premium-free for anyone who has 40 quarters or more of Medicare-covered employment. According to CMS, approximately 99% of Medicare beneficiaries do not pay a Medicare Part A premium.

If you have to pay for Part A coverage and have at least 30 quarters or were married to someone with at least 30 quarters of coverage, your premium is $278 in 2023, a $4 increase from 2022. If you have between 30 and 39 quarters, your new premium is $506 a month in 2022, a $7 increase from 2022.

Medicare Part B

Medicare Part B covers physician services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A. In 2021, Part B coverage began including up to 12 acupuncture visits in 90 days for chronic low back pain.

The standard monthly premium for Medicare Part B enrollees will be $164.90 in 2023, a $5.20 decrease from $170.10 in 2022.

Medigap

When you enroll in Medicare, you must choose between Original Medicare (Parts A and B) and a Medicare Advantage Plan (Part C). Original Medicare covers a lot of costs, but not all. So, most people who opt for Original Medicare also get a Medigap plan.

Medigap policies, also known as Medicare Supplement Insurance, are sold by private companies. Premiums vary by company and coverage provided. Medigap is designed to fill the gaps in Original Medicare coverage and, in some cases, cover medical care when you travel outside the U.S.

As of Jan. 1, 2020, Medigap plans sold to new people with Medicare could no longer cover the Part B deductible. Due to this, Plans C and F are no longer available to people new to Medicare starting Jan. 1, 2020. You can keep your plan if you were already covered by one of these plans prior to Jan. 1, 2020. Exception: If you were eligible for Medicare before Jan. 1, 2020, but not yet enrolled, you may be able to buy Plan C or F.

Medigap Plans F and G High-Deductible

Medigap Plans F and G offer high-deductible plans in some states. With these plans, you must pay coinsurance, copayments, and deductibles up to the deductible amount, which is $2,700 in 2022—up from $2,490 in 2022.

Once you reach the deductible, the plan covers any costs for Medicare-approved services. Because of potentially high out-of-pocket costs, the premiums are typically much lower than for the standard Plan F or G options.

Medicare Part C (Medicare Advantage)

Medicare Advantage Plans (Part C) are a type of Medicare offered by private companies that contract with Medicare to provide all your Part A, B, and D (drug) benefits. Most of these plans also offer some attractive extras such as dental, vision, and hearing. The number of Medicare enrollees covered by participating MA plans is expected to rise by more than 24% in 2023 from 2022.

Medicare Advantage plans typically provide more benefits with lower premiums. The downside is that MA plans require you to choose “in network” providers. If you go outside the plan’s network or geographical area, you may pay more or not have coverage at all.

For 2023, CMS says it anticipates lower premiums for Medicare Advantage compared to 2022. In addition, many Medicare Advantage plans are participating in the Part D Senior Savings Model, which offers insulin at no more than a $35 monthly copay as a result of the Inflation Reduction Act.

Medicare Part D (Prescription Drugs)

Medicare offers two ways to get prescription drug coverage—through Medicare Advantage (see above) and through a Part D Prescription Drug plan.

Part D Donut Hole

Medicare prescription drug plans have a coverage gap—a temporary limit on what the drug plan will cover. The coverage gap is often called the "donut hole." It kicks in after you and your insurer have spent a certain amount on medications in combined costs.

Once that sum's been exceeded, you have to pay for at least a portion of your drugs out of pocket. But, most plans have limits on the amount you have to pay on your own in a given year, called the out-of-pocket threshold. Once you've exceeded that amount, your coverage kicks in again. Hence, the name "donut hole."

Lawmakers have been systematically trying to plug the donut hole for years. Today, you do pay a smaller percentage of the costs of your prescription drugs than you had to in the past during the coverage gap in your Part D plan. But you still pay more when you're in the hole.

For 2023, this coverage gap starts when you and your drug plan have spent $4,660 (up from $4,430 in 2022) on covered drugs. Once you reach this level, you'll pay no more than 25% of the cost of the drugs (brand-name and generic), whether you buy your prescriptions at a pharmacy or online.

While you pay at most 25% of costs during the coverage gap, almost the full price of your prescriptions count as out-of-pocket costs, though. This helps you get through the coverage gap faster.

2023 Premiums and Deductibles

Most of the premiums, deductibles, and coinsurance amounts for the different Medicare Parts have changed. According to our research, the amounts for 2023 are:

COVID-19 and Medicare Waivers

In addition to new premium, deductible, and coinsurance amounts, the COVID-19 pandemic led to some unplanned Medicare changes that will likely continue until the pandemic ends. The U.S. Department of Health and Human Services renewed the declared COVID-19 state of emergency again on Oct. 13.

These waivers include but are not limited to:

• Increased flexibility for Medicare to cover telehealth services.
• Authorization for Medicare certification for home health services by physician assistants, nurse practitioners, and certified nurse specialists.
• Increased Medicare payments for COVID-19-related hospital stays and durable medical equipment.

The Bottom Line

Familiarize yourself with the changes listed above so you can better prepare for potential health-related expenses in the year ahead. Having a thorough understanding of what medical care costs are can help you develop a more successful budget and remain in good financial health.