Big Changes Coming to Medicare Part D Plans in 2023 and Beyond!!!
On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which includes a broad package of health, tax, and climate change provisions. The law includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government. These provisions will take effect beginning in 2023. As with many of the other provisions in the new law, the changes to Part D out-of-pocket spending will roll out over the next several years. Here’s a look at how the new cost-sharing rules will work and when the savings will start.
Shingles vaccines free
Eliminates cost sharing for adult vaccines covered under Medicare Part D, as of 2023, and improves access to adult vaccines under Medicaid and CHIP.
Starting on Jan. 1, 2023, Medicare enrollees won’t have any out-of-pocket costs for vaccines that the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices recommends for adults.
Medicare Part B, which applies to doctor visits, diagnostic tests and other outpatient services, already fully covers some vaccines, including flu shots, pneumonia vaccines, hepatitis B inoculations and coronavirus vaccines (initial shots as well as boosters).
But other vaccines, most notably the expensive vaccine for shingles, are covered under the Part D prescription drug plans, and many of those plans currently require enrollees to share the cost of those shots. The new law eliminates that cost-sharing.
Out of pocket costs capped
Caps Medicare beneficiaries’ out-of-pocket spending under the Medicare Part D benefit, first by eliminating coinsurance above the catastrophic threshold in 2024 and then by adding a $2,000 cap on spending in 2025.
- This out-of-pocket limit applies if you get your prescription drugs through a stand-alone Part D plan that people enrolled in original Medicare sign up for, or if you access your Medicare through a private Medicare Advantage plan. Most of the MA plans also cover Part D prescription drugs.
- Capping out-of-pocket drug spending under Medicare Part D will be especially helpful for beneficiaries who take high-priced drugs for conditions such as cancer or multiple sclerosis.
- Limits cost sharing for insulin to $35 per month for people with Medicare, beginning in 2023, including covered insulin products in Medicare Part D plans and for insulin furnished through durable medical equipment under Medicare Part B.
- If your Part D or MA plan has a prescription drug deductible, this will count toward the cap. For example: if your deductible is $100, once you’ve met that amount, your out-of-pocket costs will be capped once you’ve spent another $1,900 that year. In 2022 the maximum deductible Medicare allows a Part D plan to charge is $480 a year. Many plans have lower deductibles or even no deductible.
In 2024, the year before the out-of-pocket cap takes effect, Medicare beneficiaries will no longer have any out-of-pocket costs once they enter the catastrophic stage of coverage. The way catastrophic coverage works in 2022 is that once an enrollee’s out-of-pocket costs reach $7,050, they have to pay 5 percent of their prescription drug costs, with no limit. But beginning in 2024, that 5 percent coinsurance requirement will be gone, and enrollees won’t have to pay anything for their prescription drugs for the rest of the year.
Another change to the Medicare drug benefit that begins in 2025 is the requirement that Part D plans offer enrollees the option of what is called smoothed cost-sharing. This means you can opt to have your out-of-pocket costs spread out over the year. This is designed to protect people from being hit with such a big drug bill at one time that it may discourage them from filling their prescriptions.
Kaiser Family Foundation Implementation Timeline
H.R.5376 – Inflation Reduction Act of 2022: Accessed 8/18/2022: https://www.congress.gov/bill/117th-congress/house-bill/5376
KFF Issue Brief: Accessed 8/28/2022: https://www.kff.org/medicare/issue-brief/how-will-the-prescription-drug-provisions-in-the-inflation-reduction-act-affect-medicare-beneficiaries/
Beginning October 1st, licensed agents may begin marketing and presenting 2023 Medicare Advantage and Part D plans to beneficiaries. No applications can be accepted prior to October 15th.
TO LEARN MORE ABOUT MEDICARE HEALTH AND DRUG PLANS IN YOUR AREA – CALL (858) 261-5436.