Medicare Prescription Drug Plans: What’s in Store for 2023
If you’re enrolled in Medicare, you may wonder about your options for prescription drug coverage in 2023. Medicare prescription drug plans, also known as Part D, are designed to help cover the costs of prescription medications. In this article, we’ll provide an overview of medicare prescription drug plans 2023, including important changes and things to consider when selecting a plan.
What Are Medicare Prescription Drug Plans?
Private insurance companies approved by Medicare offer Medicare prescription drug plans. These plans provide coverage for prescription medications and are available to individuals who are enrolled in Medicare Part A and/or Part B. In this article, some Medicare Advantage plans also offer prescription drug coverage, but we’ll focus on standalone prescription drug plans (PDPs).
Medicare prescription drug plans have different costs and formularies (lists of covered medications) that vary by plan. Reviewing these details carefully when selecting a plan to ensure it meets your needs is important.
What’s Changing for Medicare Prescription Drug Plans in 2023?
Each year, Medicare updates the costs and coverage of its prescription drug plans. Here are some of the changes taking effect in 2023:
- Increased Deductibles: The standard deductible for Medicare Part D plans will increase from $415 to $445 in 2023.
- Higher Out-of-Pocket Maximums: The out-of-pocket maximum for Medicare Part D plans will increase from $6,550 to $7,050 in 2023. This means that once you’ve spent $7,050 on prescription drugs, your plan will cover 95% of the cost of your medications for the rest of the year.
- Changes to the Donut Hole: The coverage gap, or “donut hole,” will begin at $4,430 in 2023 (up from $4,430 in 2022). Once you reach this threshold, you’ll be responsible for a percentage of the cost of your medications until you reach the catastrophic coverage threshold. In 2023, you’ll pay 25% of the cost of generic and brand-name drugs in the donut hole (down from 25% for generics and 30% for brand-name drugs in 2022).
- New Monthly Premiums: The average monthly premium for a Medicare Part D plan is expected to increase slightly in 2023, from $33.06 to $33.67.
- Changes to Formularies: Each Medicare Part D plan has a formulary or list of covered medications. These formularies can change yearly, so reviewing them carefully when selecting a plan is important. In 2023, several plans will add new medications to their formularies, while others may remove medications or change coverage levels.
Things to Consider When Selecting a Medicare Prescription Drug Plan
With so many different Medicare Part D plans available, it can be challenging to choose the right one. Consider these variables when you weigh your options:
- Your Medications: Start by listing all the medications you take, including the dosage and frequency. Then, compare this list to the formularies of different Medicare Part D plans to see which plans cover your medications and at what cost.
- Costs: Besides monthly premiums, Medicare Part D plans can have deductibles, copays, coinsurance, and other costs. Make sure to consider all of these costs when selecting a plan.
- Network: Some Medicare Part D plans have networks of preferred pharmacies. If you have a preferred pharmacy, check if it’s in the network for the plan you’re considering.
- Star Ratings: Medicare assigns star ratings to each Medicare Part D plan based on factors like customer service, member experience, and quality of care. These ratings can be a helpful indicator of how well a plan is likely to meet your needs.
- Enrollment Period: Every year, from October 15 to December 7, is the Medicare Annual Enrollment Period (AEP). This is the time when you can enroll in, switch, or disenroll from a Medicare Part D plan. It’s important to ensure you select a plan during this period, as there may be penalties if you don’t have prescription drug coverage or enroll outside of the AEP.
- Additional Benefits: Some Medicare Part D plans offer additional benefits beyond prescription drug coverage, such as vision, dental, or hearing services. If these benefits are important to you, make sure to consider them when selecting a plan.
- Plan Ratings: The Centers for Medicare & Medicaid Services (CMS) assigns a quality rating to each Medicare Part D plan based on criteria such as customer service, member experience, and quality of care. These ratings can be a helpful indicator of how well a plan is likely to meet your needs.
Coverage Gap or “Donut Hole”
The coverage gap, often known as the “donut hole,” is one of the most important aspects of Medicare prescription drug plans in 2023. The coverage gap is a temporary period where you pay more for your prescription drugs until you reach the catastrophic coverage threshold. In 2023, the coverage gap will begin at $4,430, which means that once you and your plan have spent $4,430 on covered drugs, you’ll enter the coverage gap.
During the coverage gap, you will pay 25% of the cost of your brand-name drugs and 25% of the cost of your generic drugs. However, this is a significant improvement from previous years, where beneficiaries paid 30% for brand-name drugs and 25% for generic drugs. In 2023, you’ll continue to pay 25% of the cost of generic drugs even after you’ve reached the catastrophic coverage threshold, but you’ll only pay 5% of the cost of brand-name drugs.
It’s important to note that not all medications count towards your out-of-pocket spending or your total drug costs during the coverage gap. For instance, any discounts or assistance that you receive from drug manufacturers for covered drugs will not count toward your out-of-pocket spending. In addition, the price of your medications may not be included in your total prescription expenditures if you buy them from a pharmacy that is not part of your plan’s network.
In 2023, the average monthly premium for a Medicare prescription drug plan will increase slightly from $33.06 to $33.67. However, your premium may vary depending on the plan you select, where you live, and other factors. It’s important to compare premiums for different plans, but don’t forget to also consider other costs like deductibles, copays, and coinsurance.
You may be eligible for extra help paying for your Medicare prescription drug plan if you have limited income and resources. This program, also known as the Low-Income Subsidy (LIS), can help you pay for premiums, deductibles, and other costs associated with your Medicare prescription drug plan.
To be eligible for the LIS, your income and assets must fall within specified parameters. In 2023, individuals with an income of less than $19,140 per year and resources of less than $14,790 are eligible for the full subsidy. Individuals with an income between $19,140 and $25,860 and resources less than $14,790 may be eligible for a partial subsidy.
Choosing a Medicare Prescription Drug Plan
It can be difficult to select a Medicare prescription drug plan, but there are tools available to assist you in doing so. You can use the Medicare Plan Finder on the Medicare website to evaluate several Medicare plans based on your specific needs, such as the prescription drugs you take and the pharmacies you like to use.
When selecting a plan, it’s important to consider your medications, costs, network, and plan ratings. Checking the formulary will help you determine if your prescription drugs are included in the plan and if there are any restrictions on their use. Finally, to avoid late enrollment penalties, enroll during the Annual Enrollment Period, which runs annually from October 15 to December 7.
Medicare prescription drug plans can be a valuable resource for individuals who need help covering the costs of their prescription medications. However, with so many plans available, it’s important to carefully review your options and select a plan that meets your needs and budget. By considering factors like your medications, costs, and network, and by taking advantage of the Annual Enrollment Period, you can find a Medicare Part D plan that provides the coverage you need in 2023.
What are Medicare Prescription Drug Plans?
Medicare Prescription Drug Plans (also known as Part D plans) are private insurance plans that provide coverage for prescription drugs to people with Medicare.
Who is eligible for Medicare Prescription Drug Plans?
Anyone who is enrolled in Medicare Part A and/or Part B is eligible to enroll in a Medicare Prescription Drug Plan.
When can I sign up for a Medicare Drug Plan?
There are two times a year when you can sign up for a Medicare Prescription Drug Plan: the initial seven-month enrollment period that begins three months before your 65th birthday and the annual enrollment period that runs from October 15 through December 7.
What do Medicare Prescription Drug Plans cover?
The formulary is the approved list of medications that are covered by each Medicare Prescription Drug Plan. Plans vary in what drugs they cover and how much they cost.
How much do Medicare Prescription Drug Plans cost?
Different Medicare Prescription Drug Plans have different costs. If you elect to join a Medicare Prescription Drug Plan after you become eligible for Medicare, you may be subject to a late enrollment penalty.
What happens if I don’t sign up for a Medicare Prescription Drug Plan?
If you become Medicare-eligible and then decide to enroll in a Medicare Prescription Drug Plan, you may have to pay a late enrollment penalty.
Can I switch to Medicare Prescription Drug Plans?
Yes, you can switch Medicare Prescription Drug Plans during the Annual Enrollment Period or if you qualify for a Special Enrollment Period.
Can I use a mail-order pharmacy with my Medicare Prescription Drug Plan?
Most Medicare Prescription Drug Plans offer mail-order pharmacy services. If you use a mail-order pharmacy, you might be able to save money on your medications.
Is there a cap on how much you can make to get a Medicare Prescription Drug Plan?
You can join a Medicare Prescription Drug Plan no matter how much money you make. But if your income is above a certain amount, you may have to pay a higher premium.
How do I pick a Medicare plan for prescription drugs?
You can compare Medicare Prescription Drug Plans in your area and choose the best one by using the Medicare Plan Finder tool on the Medicare website.