Since its inception in 1965, Medicare has been one of the most important and enduring social support programs the United States offers its citizens. If you are approaching the age of 65, or have one of the unique conditions that qualify you for early access, then it’s worth taking the time to understand how Medicare functions.
We have a comprehensive guide you can read here about how Medicare works in detail, and for those new to the program, understanding all the core aspects is key. However, every year new changes are adopted and implemented, so staying up to date on these updates becomes vital to use the system effectively.
For those who have Medicare on their mind, we will do a quick overview of how the program works before diving into the 2023 updates and notable changes you should be aware of as we head into the new year.
How Medicare Works
As early as three months prior to your 65th birthday, Americans become eligible to enroll in the Medicare healthcare program. If this applies to you, then you can begin your application process here to get the process started.
Medicare most often is used to replace employer-based health insurance, and the four primary aspects of the program are:
- Medicare Part A (Hospital Insurance)
- Medicare Part B (Medical Insurance)
- Medicare Part C (Private Insurance)
- Medicare Part D (Prescription Medication Insurance)
Parts A and B (Original Medicare) are used to cover core medical services like hospital visits while Part C (Medicare Advantage) can be understood as private-insurance alternatives that bundle all the services found in the other sections.
Part D is where changes most often occur, as it deals primarily to cover the costs of prescription medications that “Original Medicare” does not cover. Medicare Part D has four phases of coverage that users need to be aware of before and during enrollment in the program. The basic breakdown of what phase entails can be found below, and in bold, the notable financial changes for 2023.
- Phase 1: Deductible
- Patients pay full price for in-network prescriptions until the deductible amount is reached.
- In 2022, the annual deductible limit was set at $480.
- In 2023, the annual deductible limit will increase to $505.
- Phase 2: Initial Coverage
- Patients pay a fixed amount copay or percentage of the negotiated cost of a prescription until they reach the initial coverage limit.
- In 2022, the initial coverage limit was $4,430.
- In 2023, the initial coverage limit will increase to $4,660.
- Phase 3: Coverage Gap (aka Donut Hole)
- Generally, patients pay 25% of the retail costs of their prescription medications until the coverage gap limit is reached.
- In 2022, the coverage gap limit was $7,050.
- In 2023, the coverage gap limit will increase to $7,400.
- Phase 4: Out-Of-Pocket (aka Catastrophic Phase)
- At this phase, patients pay a small coinsurance percentage or copay dollar amount on eligible drugs.
- In 2022, this translated to $3.95 for generic medications, $9.85 for brand-name, or 5% of the total cost (defaulting to the highest amount of the three).
- In 2023, these limits will increase to $4.15 for generic medications and $10.35 for brand-name.
Typically these limits increase along these lines year over year to meet rising costs and inflations, but they aren’t the only changes to Medicare of which you should be aware. Often bills are passed specifically to alter the program based on new issues and growing trends, and by understanding these, more fluid navigation of the program becomes possible.
At Community Pharmacy, we understand that this is quite a bit of information for an individual to take in and digest on their own. That’s why we offer free appointments for clients, where our trained staff can help you review your Medical Part D benefits and ensure you are on the right track within the proper enrollment period.
Other Notable Changes
Some of the most significant changes to the Medicare system come as a result of the passage of the Inflation Reduction Act. Signed into law on August 16, 2022, this extension of the Affordable Care Act (ACA) was designed to efficiently reduce the cost people pay for treatments.
For those who require regular insulin treatment, the cost per month has been capped at $35 as part of the Part-D coverage. This is fantastic news for those who live with type 1 and type 2 diabetes and require regular insulin shots, pens, or pumps as treatment.
Additionally, those who have Medicare Part D coverage will now pay nothing for an expanded list of vaccinations. These include:
- Influenza (flu) shorts
- Pneumococcal (pneumonia) shots
- Hepatitis B shots
- Tdap Vaccines (tetanus, diphtheria, and pertussis/whooping cough)
- COVID-19 vaccine shots
- All commercially available vaccines deemed reasonable and necessary to prevent illness
These changes ultimately curb the cost of vital treatments and expand the protective umbrella Medicare provides. These welcome changes will take effect within just a few months, and if you feel like they might affect you or a loved one, contact a Community Pharmacy team member to ensure you are set up to receive the benefits you need.
Possible 2024 and Beyond Medicare Changes
While the above changes are set and guaranteed for 2023, the program will continue to adapt to meet the challenges and needs of the years ahead.
Some ideas that are currently being negotiated and could become law as soon as 2024 are:
- A hard cap on out-of-pocket total prescription costs.
- Granting Medicare the ability to deal with drug manufacturing directly to negotiate costs
- Part D expansion for low-income subsidies.
- Help seniors with low income pay premiums and medical costs.
In 2025, we can expect more caps to out-of-pocket expenses along with an expansion of the medication list to include more common and costly ones. These changes are fluid, so if Medicare affects you or a loved one, then keep a close eye on the news as it develops to stay up to date.
What Medicare Means to You
The annual enrollment period for Medicare Part D, known as Open Enrollment, is October 15th through December 7th each year. Medicare Part D enrollment is a confusing process, and many aspects may change year-to-year:
- Patient’s maintenance medications
- Patient preference
- Plan formulary medications
Did you know that insurance plans can change year-to-year? Insurance plans know patients typically opt to stay in their plan because it worked well for them the prior year, but they can increase their prices the following year and change the medications previously covered! Don’t get stuck in a plan that is no longer right for you or your loved one.
Community Pharmacy helps patients and caregivers navigate through the confusing process of Medicare Part D Open Enrollment season by offering personalized Medicare Part D reviews. You can schedule an appointment with our expert pharmacist to receive some comparable options and the education to empower your decision.
Benefits of Medicare Part D reviews:
- Patients/caregivers feel more confident choosing a Medicare Part D plan
- Patients save by choosing a more affordable plan
- Patients are able to continue receiving their prescriptions at Community Pharmacy
Medicare has become one of the most successful and widely used programs by the American people, and the program has provided hundreds of millions with affordable medical care throughout the years. If you or someone you know is on the verge of qualifying for Medicare or would like to review plan options during Open Enrollment season annually, then take steps today to ensure you enroll successfully and continue filling prescriptions at your preferred pharmacy.
For a personalized plan review, set an appointment with your local Community Pharmacy today, and rest easy knowing you will be insured and protected for years to come.