Danielle K. Roberts, founding partner of Boomer Benefits, Fort Worth, Texas. She is a Medicare Supplement Accredited Advisor and author of 10 Costly Medicare Mistakes You Can’t Afford to Make.
The Medicare system is undergoing change these days as new legislation takes effect and the COVID public health emergency officially ends. Many of these changes are in beneficiaries’ favor, but some are not—and even the favorable changes could create confusion.
Bottom Line Personal asked Medicare expert Danielle K. Roberts what you need to know about the changes—including some easy-to-overlook details that could trip you up…
Insulin price caps are in place—but there’s a potential gotcha. Starting this year, Medicare beneficiaries will have a copay of no more than $35 for a 30-day supply of any insulin listed in their Part D plan’s covered drugs. The $35 out-of-pocket cap applies even if the beneficiary has not yet reached his/her Part D deductible…and even when the insulin is covered under Medicare Part B (medical insurance) rather than Part D (prescription drug coverage) because it’s delivered via a pump.
This is all good news for people who have diabetes—but there are a few caveats. The $35 cap will not apply to an insulin that’s not listed in the beneficiary’s Part D plan’s “formulary” of covered drugs (which you usually can find on the plan’s website or in your membership portal)…and some diabetes-management drugs—including injectables that combine insulin with other ingredients or don’t contain insulin at all—won’t be covered. Examples: Trulicity, Bydureon BCise, Byetta, Mounjaro, Ozempic, Symlin and Victoza.
If you have diabetes: Confirm with your Part D plan that the insulin you have been prescribed is in its formulary…and check how well any other diabetes-management drugs you’re prescribed are covered. If any have steep copays, ask your doctor whether you could safely switch to better-covered drugs.
No more lengthy enrollment delays when enrolling in Parts A or B during the general enrollment period—but it still is best to sign up for Medicare as soon as you are eligible. In the past, some new enrollees had to wait months for their Medicare coverage to begin. Example: Anyone who signed up for Medicare during the annual January 1 through March 31 “general enrollment period” typically was not covered until July 1 of that year, creating a dangerous coverage gap. Starting January 1, 2023, when you enroll during the general enrollment period, Medicare coverage begins on the first of the month following the month of enrollment.
Despite this new rule, don’t wait to enroll in Medicare. If you sign up as soon as possible—that is, during the three months that precede the month of your 65th birthday—your benefits will begin at the start of that birthday month…and if your birthday happens to fall on the first of the month, your benefits even could begin the month before your birthday month. Missing your initial enrollment period could result in late-enrollment penalties if you do not have other creditable coverage in place. Exception: If you are covered by a large employer’s group plan and/or are contributing to a Health Savings Account (HSA), it might make sense to postpone enrollment beyond the months preceding your 65th birthday—but this potential exception applies only if you are an employee of a company or organization with 20 or more employees. If your group plan coverage is obtained through a retiree health benefits package, COBRA and/or a smaller employer, sign up for Medicare as soon as you are eligible to avoid coverage gaps.
Similar: Another new rule that has taken effect this year extends “special enrollment periods” to people who missed earlier enrollment periods due to certain unusual situations. Example: If you missed an opportunity to enroll in Medicare because your employer or its plan provider gave you inaccurate information about your right to remain on its group plan, you could qualify for a special enrollment period that allows you to join Medicare at the start of the following month, without having to wait for the next general enrollment period.
Part B premiums and deductibles fell slightly in 2023—but that’s an exception, not a new trend. Medicare monthly premiums and annual deductibles rise most years, so beneficiaries might have been surprised when the Part B standard premium dropped by around $5 a month in 2023 and the annual deductible was reduced by $7. But these modest cost reductions don’t herald a new age of falling Medicare bills.
Medicare Part B premiums were increased in 2022 to account for the expected cost of covering the new Alzheimer’s drug Aduhelm—but that drug proved less costly for the Medicare system than had been feared. The 2023 Part B cost decreases are simply compensation for those 2022 Aduhelm-related overcharges. Medicare Part B out-of-pocket costs almost inevitably will resume their traditional upward trend in 2024—premiums and deductibles both have more than doubled since 2005.
Part D out-of-pocket cost caps are coming—but they’re not here yet. Under the current rules, you may incur some very high out-of-pocket costs with Medicare’s Part D prescription drug coverage. Beneficiaries are responsible for up to $7,400 in out-of-pocket prescription drug expenses before they reach Part D’s “catastrophic coverage” phase. And the expenses don’t end even in the “catastrophic” phase—beneficiaries still are responsible for paying a 5% coinsurance. There currently is no hard cap for Part D out-of-pocket costs.
But starting in 2024, the 5% coinsurance in Part D’s catastrophic coverage phase will be eliminated…and starting in 2025, Part D out-of-pocket prescription drug costs will be capped at $2,000. That’s very good news for anyone who requires very expensive drugs in the future—but of little use to anyone who needs them in 2023.
Vaccines no longer require a copay—as long as they’re recommended by the Advisory Committee on Immunization Practices (ACIP). Medicare’s vaccine coverage has long been a source of confusion—some vaccines are covered under Medicare Part B medical insurance…others under Part D drug plans. In years past, that distinction led to some unexpected health-care bills—Part B vaccines typically were provided to Medicare beneficiaries with no copays…but Part D vaccines often resulted in out-of-pocket costs, in part due to Part D’s deductibles. Example: Medicare beneficiaries who hadn’t met their Part D annual deductibles often were surprised to receive bills of $300 or more for the two-dose shingles vaccine.
Starting this year, vaccines are covered without any copays for Medicare beneficiaries regardless of whether they’re covered under Part B or Part D. One caveat: The vaccine must be recommended by the ACIP. The list of recommended vaccines for people of Medicare-eligibility age includes influenza, shingles, Tdap (for tetanus, diphtheria and pertussis), COVID-19 and pneumococcal vaccines. Additional vaccines might be recommended under specific circumstances.
Expanded telemedicine coverage will continue—for now. Medicare has traditionally covered “telemedicine”—obtaining medical treatment remotely—only under very specific circumstances. Examples: The beneficiary had to live in a rural area, and the telehealth visit had to include a video component, not just be a phone call. Many of those telemedicine coverage restrictions were waived during the pandemic. With the public health emergency officially ending in May, there was a risk that those restrictions could return.
It doesn’t appear that will happen anytime soon—the Consolidated Appropriations Act passed in the final days of 2022 extended the flexible pandemic-era telehealth coverage rules until the end of 2024. But if no further action is taken, telehealth bills could strike when this extension ends at the start of 2025.
Dental coverage has expanded—but only slightly. Even though Medicare’s coverage of dental procedures has expanded this year, the majority of dental visits still are not covered. The recent change improves coverage for only dental procedures that are integral to the success of certain nondental medical procedures. Example: The treatment of a dental infection could be covered if treating that infection improves the odds of success of a necessary organ transplant or cardiac procedure.
Officially, Medicare was supposed to cover many medically necessary dental treatments even before these new rules…but in practice, those dental claims often were rejected. The new rules should at least improve the odds that Medicare will cover this specific category of dental procedure.