There are four main different parts of Medicare coverage, as discussed below:
– Part A: Often called hospital insurance as it helps cover costs associated with hospital stays, nursing care, and hospice. This coverage is automatic upon retirement age and there is no premium payment for most people. However, there are certain limitations.
– Part B: This part is often called major medical insurance because it covers things like outpatient care, doctor appointments, lab tests, and medical equipment. This coverage must be applied for and there are monthly premium payments and deductibles.
– Part C (Medicare Advantage): Original Medicare does not provide for things like dental and vision coverage. The government allows private insurance companies to sell separate Medicare Advantage policies that do cover these and other things, subject to government oversight.
– Part D: This is to cover prescription drugs and costs that regular Medicare doesn’t cover. These are also separate policies sold by private insurance companies.
The major changes in Medicare for the year 2023 are listed below.
While about 99% of all enrollees pay no premium for Part A coverage, there are required deductible and co-insurance payments. The deductible will be $1,600 in 2023, up from $1,556 in 2022. The deductible applies to all Part A enrollees. This deductible covers the enrollee’s first 60 hospital inpatient days during a benefit period. If the person needs additional inpatient coverage during that same benefit period, there’s a daily coinsurance charge. For 2023, it will be $400 per day for the 61st through 90th day of inpatient care (up from $389 per day in 2022).
For care received in skilled nursing facilities, the first 20 days are covered with the Part A deductible. A coinsurance payment applies to days 21 through 100 in a skilled nursing facility. In 2023, it will be $200 per day, up from $194.50 per day in 2022.
Unlike Part A, everyone has to pay a monthly premium for Part B. But for 2023, it is actually decreasing – the first time it has gone down since 2012. The standard premium for Medicare Part B is $170.10/month in 2022, but it’s decreasing to $164.90/month in 2023. Part B also has a required deductible, which is also decreasing. The Part B deductible for 2022 is $233, and it’s decreasing to $226 in 2023.
Medicare beneficiaries with high incomes pay more for Part B. The threshold where the surcharge starts to be added is increasing again, to $97,000 for a single person and $194,000 for a married couple, up from $91,000 and $184,000, respectively, in 2022. For 2023, the Part B premium for high-income beneficiaries ranges from $230.80/month to $560.50/month, depending on income.
The premium payments for these plans are set by the private insurance companies. However, the government does limit the amount of out-of-pocket costs that can be charged. For 2022, the maximum out-of-pocket limit for Medicare Advantage plans increased to $7,550 (plus out-of-pocket costs for prescription drugs). For 2023, the cap is increasing to $8,300. But most Advantage plans will continue to have out-of-pocket caps below the government’s maximum.
The standard plan’s maximum deductible will increase to $505 in 2023, and the threshold for entering the catastrophic coverage phase (where out-of-pocket spending decreases significantly) will increase to $7,400. However, the Inflation Reduction Act will ensure that Part D enrollees no longer have to pay for covered vaccines, and will have access to insulin for no more than $35/month.
Medicare coverage for kidney transplant recipients has only lasted for 36 months after the transplant. But as of 2023, that’s no longer the case. After 36 months, kidney transplant recipients will be able to continue to have limited Medicare Part B coverage for immunosuppressive drugs. This will cover the medications that transplant recipients must take for the rest of their lives in order to prevent their bodies from rejecting the transplanted kidney.
Beginning in 2023, if you sign up in the month you turn 65 or the three months thereafter, your coverage begins on the first day of the following month. This is a change from previous years, when you had to wait up to three months after you signed up for your coverage to start in some cases.