Changes coming in 2023 and 2024 will impact many of the 50 million Americans who have Medicare prescription drug coverage. This important protection is typically either purchased on a stand-alone basis or as part of a Medicare Advantage plan.
Changes for 2023 were recently announced by the Centers for Medicare & Medicaid Services (CMS). Those starting in 2024 are included in the Inflation Reduction Act passed through the U.S. Senate and being reviewed by the House prior to signature by President Joe Biden.
Because many people can freely change their Medicare prescription drug plans on an annual basis, understanding the timing and impact of changes can help you save money and increase overall benefits and plan satisfaction.
2023 Medicare Part D Premium Savings
For those purchasing Medicare Part D prescription coverage on a stand-alone basis, a small drop in monthly premiums is expected.
CMS anticipates that average monthly premiums for 2023 drug plan coverage will drop to $31.50 from the current average of $32.08. Experts note a significant spread between the lowest-available and highest-available premium continues to exist. According to the American Association for Medicare Supplement Insurance (AAMSI), the typical consumer switching Medicare Part D plans saves between $550 and $750 a year.
As an example, in Cook County, Illinois, some 18 different Medicare Part D plans exist. According to the latest data from AAMSI, costs for a 65-year-old female range from a low of $6.90 per month to as much as $94.30. Available plans may include a drug co-pay ranging from $5 to as much as $19 for preferred generic drugs. The 2022 in-network deductible for the 18 plans ranges from $0 to $480.
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Maximum Part D Deductible May Rise In 2023
While a potential decrease in monthly premiums can benefit seniors, the maximum deductible for Part D coverage is projected to rise to $505 in 2023. That represents an increase from the current $480. In addition, the out-of-pocket threshold plans can impose will rise from the current $7,050 to $7,400 next year.
Insurance companies set the limits for their plans. Reviewing coverage on an annual basis in advance of Medicare’s Annual Enrollment Period (AEP) is a smart financial move overlooked by many. AEP begins Oct. 15 and concludes Dec. 7.
Medicare Star Ratings Will Gain Greater Relevance
Medicare issues Star Ratings for Medicare Advantage and Part D prescription drug plans. Released annually the ratings reflect the experiences of enrolled plan participants. Plans are rated on a 1-to-5 scale, with 1 star representing poor performance and 5 stars representing excellent performance.
To help consumers better evaluate customer satisfaction with Part D prescription drug plans, Medicare will change the weights of various components used to compile star ratings. For example, complaints received about a particular drug plan will carry a weight of 4. Feedback from members choosing to leave a particular plan will weigh more heavily into the overall star rating.
Coming In 2024: New Medicare Drug Plan Benefits
With the Senate’s passage of the Inflation Reduction Act, Democrats are within reach of a long-time goal. For the first time, Medicare will be able to negotiate drug prices starting in 2026. Americans with Medicare Part D coverage accounts for nearly a third of all prescription spending.
The new law empowers the federal government to negotiate prices for certain expensive medications. In 2026 Medicare can negotiate the prices of 10 selected drugs. That increases to 15 drugs in 2027 and 2028 and 20 drugs in 2029.
In addition, the new law places a $2,000 cap on out-of-pocket costs for prescription drugs taken by seniors. It will also require pharmaceutical companies to pay rebates if their drug prices rise faster than inflation.
Finally, the bill caps the price of insulin at $35 per month for Medicare patients. This represents a significant benefit for the 3.3 million beneficiaries who use some common form of insulin. The average Medicare patient using insulin spent $54 per prescription in 2020, according to recent data.
Easy Ways To Find Best Drug Plan Options
Comparing Medicare drug plans can be a relatively simple process. Independent insurance agents who assist with Medicare insurance information are often willing to undertake comparisons for their clients.
A number of excellent online Medicare drug plan cost comparison tools will enable you to quickly find plan options for your ZIP code. Experts at AAMSI suggest seeking one that will provide information and plan pricing comparison without requiring the entry of personal data. The association makes available a tool accessible on its website.
About Jesse Slome
Medicare Expert – Director Long Term Care Insurance Association, Medicare Supplement Insurance & Critical Illness Insurance Association