The Centers for Medicare & Medicaid Services (CMS) recently began to set premiums for 2023. While some Medicare premium rates for 2023 have yet to be announced, premiums for Medicare Part D have already been announced.
Medicare Part D provides coverage for prescription drugs. You need to already participate in Medicare Part A (hospital insurance) and/or Part B (medical insurance) to sign up for Part D. Like other insurance plans, Part D requires the enrollee to pay a monthly premium to stay in the plan.
The monthly premium for Medicare Part D is set to decrease next year, potentially saving money for some seniors as inflation continues to remain high. CMS announced that the average basic premium for Part D will be approximately $31.50 per month. Currently, the average basic Part D premium is $32.08 monthly. The projected premium decrease, therefore, represents a 1.8% decrease from the current average rate.
Despite the announcement about Part D premiums, CMS has not yet announced projected cost-sharing, including coinsurance and copays, for Part D. CMS projects that they will announce this sometime in September 2022.
Further, CMS has not yet released premium information for 2023 regarding Medicare Advantage Plans, also known as Medicare Part C. This information is also projected to be released in September 2022. Medicare Advantage plans are health plans from private companies that are under contract with Medicare. These plans generally provide all of your Part A and Part B benefits, and often some Part D benefits. Part A gives coverage for hospitalizations, skilled nursing facilities, hospice coverage, and some home health services. Meanwhile, Part B covers outpatient needs like doctor’s office visits, medically necessary supplies, and preventative care.
Health and Human Services Secretary Xavier Becerra had long projected a decrease in premiums across the board for Medicare plans. He attributed the premium decreases to an overestimate of the expenses CMS would incur due to the Alzheimer’s drug Aduhelm, the brand name for aducanumab-avwa. The medication is controversial as it was approved despite weak evidence of benefit in Alzheimer’s patients and had an original annual cost of $56,000 per patient.
Due to the controversy surrounding Aduhelm’s approval and unclear benefit, CMS limited its approval of the drug to clinical trials approved by the Food and Drug Administration (FDA) or the National Institutes of Health (NIH). This limited use of the drug despite earlier projections of higher use means that CMS has saved money that they are passing back to consumers via Medicare premium decreases.
As CMS originally expected higher use of Aduhelm, they increased Medicare premiums to pay for it. For example, Medicare Part B premiums increased to $170.10 for 2022, up from $148.50 per month in 2021. This decision was made before CMS decided to restrict its approval of Aduhelm to clinical trials, and also before Aduhelm’s manufacturer more than halved its price to $26,200 a year. If CMS had been able to take these changes into account when coming up with 2022 premiums, the premiums would have only increased to $160.40 per month. Although the Medicare Part B premiums for 2023 have not yet been announced, experts believe that if premiums increase, it will be a much smaller increase than last year due to the Aduhelm issue being largely resolved.
The information on monthly premium costs can be helpful for seniors as they navigate the Medicare Open Enrollment period, which will start on October 15, 2022 and continue through December 7, 2022. Any Medicare plan changes made during this time will be reflected during the 2023 coverage period starting on January 1, 2023.
However, some seniors may still struggle with Medicare premiums and copays. Inflation is still high, and although experts project a Social Security Cost of Living Adjustment (COLA) around 9% for 2023, it has not yet been announced. A COLA of 9% would increase the average Social Security check by approximately $150 per month, which can be eaten away by not only Medicare premiums, but also increasing grocery and fuel costs.
Help is available, though, to defray some of these costs. Seniors with Medicare may be eligible for the Medicare Savings Programs (MSP), which can help cover Medicare costs. MSPs can help pay for Medicare Part A and/or Medicare Part B deductibles, coinsurance, and copays. However, it is necessary to meet eligibility criteria, and the programs differ widely in terms of the assistance they offer. Four MSPs currently exist, including:
- Qualified Medicare Beneficiary (QMB) Program: Helps cover Part A premiums as well as Part B premiums, deductibles, coinsurance, copayments, and a copay limit for prescription drugs (this limit is $4 in 2022 and has yet to be announced for 2023). Individuals are subject to a monthly income limit of $1,153 ($1,546 for married couples) and a resource limit of $8,400 ($12,600 for married couples).
- Specified Low-Income Medicare Beneficiary (SLMB) Program: Helps cover Part B Premiums, although you must have both Part A and Part B to qualify. Drug copays are limited to $9.85 as of 2022, with 2023 rates still pending. Individuals are subject to a monthly income limit of $1,379 ($1,851 for married couples) and a resource limit of $8,400 ($12,600 for married couples).
- Qualifying Individual (QI) Program: Helps cover Part B Premiums, although you must have both Part A and Part B to qualify. Drug copays are limited to $9.85 as of 2022, with 2023 rates still pending. Individuals are subject to a monthly income limit of $1,549 ($2,080 for married couples) and a resource limit of $8,400 ($12,600 for married couples).
- Qualified Disabled Working Individual (QDWI) Program: Helps cover Part A premiums. Individuals are subject to a monthly income limit of $4,615 ($6,189 for married couples) and a resource limit of $4,000 ($6,000 for married couples).
If you are new to Medicare or are looking into changing your Medicare plan during Open Enrollment, check out Medicare.gov or use online plan finders like Hella Health can help you sort plans to optimize your premiums, copays, coinsurance, deductibles, and coverage.