Medicare Part D Premium Will Decrease in 2023
The Centers for Medicare and Medicaid Services (CMS) recently announced the average basic monthly premium for standard Medicare Part D coverage is projected to be approximately $31.50. This expected amount is a decrease of 1.8% from $32.08 in 2022. If you have questions about how much Medicare costs, our advisors are here to offer local help with Medicare concerns.
CMS Announces 2023 Medicare Part D Rate and Defined Benefit Coverage Parameters
Below are highlights of the finalized 2023 defined standard Medicare Part D prescription drug plan parameters as released by the Centers for Medicare and Medicaid Services (CMS). The Defined Standard Benefit is the minimum allowable Medicare Part D plan coverage. However, CMS does allow Medicare Part D plans to offer a variation on the defined standard benefits (for example, a Medicare Part D plan can offer a $0 Initial Deductible).
There are four different phases of Part D coverage: Deductible; Initial Coverage Limit Period; Coverage Gap; Catastrophic Coverage.
Initial Deductible: Will be increased by $25 to $505 in 2023. Initial Coverage Limit (ICL): Will increase from $4,430 in 2022 to $4,660 in 2023. Out-of-Pocket Threshold (or TrOOP): Will increase from $7,050 in 2022 to $7,400 in 2023.
Coverage Gap (Donut Hole): Begins once you reach your Medicare Part D plan’s initial coverage limit and ends when you spend a total of $7,400 out-of-pocket in 2023.
2023 Coverage Gap Discount: Brand Name: Once you reach the coverage gap, you’ll pay no more than 25% of the cost for your plan’s covered brand-name prescription drugs. Although you’ll pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as out-of-pocket costs to help you get out of the coverage gap. What you pay and what the manufacturer pays (95% of the cost of the drug) will count toward your out-of-pocket spending. For example: If you reach the Donut Hole and purchase a brand-name medication with a retail cost of $100, you will pay $25 for the medication, and receive a combined $95 credit toward the total out-of-pocket threshold. Generic: Medicare will pay 75% of the price for generic drugs during the coverage gap. You’ll pay the remaining 25% of the price. For the same example above, the $25 you pay will be counted as a credit towards your out-of-pocket spending threshold.
Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit: Once you’ve spent $7,400 out-of-pocket in 2023, you’re out of the coverage gap. Once you get out of the coverage gap, you automatically get “catastrophic coverage.” Beneficiaries will be charged $4.15 for generic drugs or $10.35 for brand name drugs or a co-insurance of 5%, whichever is greater.
Need help calculating your 2023 drug costs? For more information and guidance on prescription drug coverage and costs, please call us at (858) 391-8544.
CMS Newsroom: Accessed August 1, 2022:
2023 Medicare and You Handbook: https://www.medicare.gov/Pubs/pdf/10050-medicare-and-you.pdf