The year 2023 brings changes to the rules, limits and options on all kinds of federal programs and Medicare is no exception. Roughly 65 million senior citizens who rely on Medicare for health coverage will pay less for several things, but more for Part A coverage. They will also get free vaccinations and a long-needed cap on charges for insulin. Here’s what you need to know.
A financial advisor can help you create a financial plan for your health expenses in retirement.
Six Medicare Changes for 2023
The Centers for Medicare & Medicaid Services (CMS) says that at least 64.5 million Americans relied on Medicare Parts A and/or B as of August 2022. Here are six big changes that will impact Medicare coverage in 2023:
Part A costs are increasing: Part A covers hospitalization and charges no premiums to most enrollees, based on their work history or their spouse’s. For the 1% of participants who do pay, premiums will increase from $274 to $278 per month for people with more than 30 quarters of work history but less than 40 quarters. For those with less than 30 quarters of work history, the premium rises from $499 a month to $506 a month.
Other Part A changes: The deductible increases from $1,556 to $1,600 this year. The daily co-insurance charge that kicks in after the first 60 days of hospitalization goes from $389 to $400 per day for the 61st through 90th day of inpatient care. After 90 days, the co-pay is $800 per “lifetime reserve day,” with a maximum of 60 reserve days during your lifetime.
Part B premiums decrease: Part B covers outpatient care and the premium dips from $170.10 last year to $164.90. Higher-income enrollees pay more, based on their 2021 adjusted gross income. Most participants have their Part B premiums automatically paid from their Social Security payments, which gets an 8.7% cost of living adjustment this year. The premium decrease means that enrollees will be able to use the entire increase for other expenses.
Part B also is headed down: It will decline from $233 last year to $226 for 2023. After meeting this deductible most enrollees typically pay 20% for the cost of covered services.
Insulin co-pays capped: After widespread reports of diabetic patients scrimping on their medication – resulting in death in some cases – as a result of soaring insulin prices, the Biden administration added a cap of $35 for any monthly supply to the 2022 Inflation Reduction Act. Most drug costs are covered by Medicare Part D, but the cap also will apply to insulin pumps in Part B.
Free vaccines: Also thanks to the Inflation Reduction Act, Medicare Part D, which covers prescriptions, will make all covered vaccines free to enrollees. That includes vaccinations recommended by the Centers for Disease Control and Prevention. That includes the two-dose Shingrix vaccine for the painful and debilitating shingles virus that could cost more than $400 for both doses. Shingles can strike anyone who has had chickenpox. The Centers for Disease Control and Prevention estimates that about one out of every three people in the U.S. will develop shingles at some point.
Prescription price negotiations: After years of being specifically prohibited, Medicare will be able to negotiate prices for drugs, starting in 2026. At that point, co-pays for insulin and other drugs where the prices are negotiated will be 25% of the negotiated price or $35, whichever is less.
Bottom Line
Approximately 65 million Americans will pay less for Part B Medicare premiums in 2023, among other things. Part A coverage, however, will go up slightly. But beneficiaries will also get free vaccinations and a cap on insulin charges.
Retirement Tips to Pay for Costs
- You can prepare for retirement on your own but there is a lot to consider, especially when you take into account that so many people have been blindsided by rising medical costs. A financial advisor help you create a financial plan to cover those expenses. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you’re trying to find the right balance in your retirement portfolio, consider using SmartAsset’s free asset allocation calculator to help you get the right mix that can help you hit your financial goals.
Photo credit: ©iStock.com/andreswd, ©iStock.com/Rockaa