Medicare Prescription Drug Plan Changes for some 2023 Plans

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Medicare Prescription Drug Plan Change for some 2023 Plans

Earlier last year, the Trump administration rolled out a historic agreement with insulin drug manufacturers to cut costs for Medicare beneficiaries by up to 66%. This was big news as it impacts over 3 million seniors who rely on insulin to manage diabetes.

The Senior Savings Model caps the copayment on insulin to $35 in every phase of Part D coverage except the catastrophic coverage phase. With this new model, people with diabetes enrolled in a participating plan will pay a maximum of $35 for their insulin even if they have not yet met their deductible.

If you are a Medicare beneficiary and use insulin, you will want to select one of these new Part D plans to become effective on January 1, 2023. Use Medicare’s Plan Finder Tool to look through the plans available in your zip code.

It is essential to list the insulin you use in your search as the insurance companies are not required to cover every type of insulin in formularies; they can choose specific insulin brands. However, Senior Savings Model plans must cover at least one pen-dosage and one vial-dosage option for each type of insulin.

What’s Not Changing for 2023: Your Medigap Plan Benefits

Medigap Plans DO NOT change during the annual Medicare open enrollment period.

Because the Part D plans change annually, Medicare beneficiaries wonder if their Medigap (Medicare Supplement) plan benefits also change between October 15 – December 7.

The answer is NO.

Your Medigap plan has federally standardized benefits that do not change yearly like Part D plans.

Let me say that again because it is the most common question every year. Your Medigap benefits do not change year to year as your Part D plan does.

If you have a Medigap Plan F, Plan G, or Plan N (or any other Medigap plan), rest assured that nothing would change with the benefits. Your plan next year will continue to cover all the same benefits that it covered this year.

Rates May Change, Benefits Do Not

Medigap plans DO have rate increases annually, but the increase occurs on your policy anniversary date. If you originally bought your policy on January 1 of a past year, then your policy renewal does occur each year on January 1.

That means you will receive your notice of increase from your carrier in December. It occurs along with the OEP but is unrelated to the Medicare Fall Open Enrollment Period.

Think of this like your auto insurance or homeowners insurance:

If you originally bought your homeowners insurance on June 1, 2014, then every year on June 1, you will get a rate increase. The same thing happens with Medicare supplement insurance.

If your Medigap plan renews each year in January because you originally bought it with a January 1 effective date, that is coincidental. The plan’s benefits are NOT changing; only the premium changes yearly on Medigap plans.

The Medicare OEP Does Not Prevent Underwriting on New Medigap Policies

Many people mistakenly believe you can change your Medigap plan during the OEP without health questions.

In most states, you must pass medical underwriting to be approved for a new Medigap plan.

That is not the case because, as we said above, the OEP doesn’t pertain to Medigap. In most states, you will have to answer some health questions on that new application. The insurance company can decide whether to accept or reject you.

People are surprised because the “Open Enrollment Period” sounds like a time when you can openly change to another plan without restrictions. That is true, but it doesn’t apply to Medigap plans – only to Part D or Medicare Advantage.

For this reason, my team here at my agency uses the phrase Annual Election Period. It is less confusing to our clients.

To recap:

  • Someone with Part D can change to another Part D plan – no health questions.
  • Someone with Medicare Advantage can change to another Medicare Advantage plan – one health question.
  • Changing from Medigap to Medigap – a whole page of health questions.

Medigap plans require you to pass medical underwriting unless you have a unique circumstance that qualifies you for a guaranteed issue. For example, if you move out of state mid-year, you’ll be given a Special Election Period.

You can use this short period to change to a plan offered in your new service area. If you don’t have a particular election period, you’ll need to answer health questions to get approved for a new Medigap plan.

(We should also note that a few states have the birthday rule. For example, California and Oregon have periods once a year where you can change to an equal or lesser policy during your birth month without health questions.) Most other states require underwriting.

Your Medicare Part B Premium Might Also Change in 2023

Medicare Part B premiums can go up from year to year.

Every year the federal government can adjust your Medicare Part B premium. Part B premiums are tied to the Cost of Living Adjustment in your Social Security benefits. Back in 1965, new enrollees paid $3/month for Medicare Part B. In 2022, new enrollees will pay at least $170.10/month, but this will likely change for 2023. Some people pay more based on their gross household income.

Generally, if Social Security issues a COLA inflation adjustment that increases your Social Security monthly income benefits, the Part B premium usually also increases.