Whether you are enrolled in traditional Medicare or a Medicare Advantage plan, Medicare covers the prescription drugs you get from the pharmacy under Medicare Part D. The vast majority of people with Medicare, 49 million in 2022, are enrolled in a Part D drug plan. Here’s what you need to know about Medicare Part D coverage and costs in 2023.
Don’t assume that your current Part D drug plan will cover your drugs in 2023, even if they did in 2022. Rather, assume that your costs will go up a lot if you didn’t check which Part D plan was likely to save you the most money based on your drug needs, during the Medicare open enrollment period (October 15-December 7). Each year, these private insurance plans can change dramatically. Kaiser Family Foundation reports on your options.
As a general rule, close to three in four people enrolled in traditional Medicare and a Part D plan will pay higher costs the following year, if they do not look at their options and switch plans.
In 2023, there are 16 national Part D prescription drug plans, with monthly premiums ranging from $6 to $111. The average premium is $43, up 10 percent from 2022. AARP offers the highest cost Part D drug plan.
Premiums: Premiums are typically higher for Part D plans offering enhanced benefits, lower cost-sharing and/or low or no deductibles. Standard Part D plans have an average monthly premium of $37. Part D “enhanced” plans that charge no or a low deductible have an average monthly premium of $48 in 2023.
Standard deductible: The standard and highest possible deductible—the amount you must pay before your coverage begins—is $505.
If you have traditional Medicare: You typically will be able to choose among 24 Part D drug plans. Depending upon the state you live in, your options range between 19 and 28.
If you are in a Medicare Advantage plan: You typically will have a choice of around 35 Part D drug plans.
Cost-sharing: For non-preferred brand name drugs, coinsurance could be as high as 40-50 percent and as low as $0 for preferred generics, depending upon the Part D plan you choose. You also are likely to pay 15-25 percent coinsurance for preferred brand drugs.
Typically you’ll pay about $1 for preferred generics and $5 for generics. You’ll pay around $44 copay for preferred brands, 45 percent coinsurance for non-preferred drugs, and 25 percent coinsurance for specialty drugs.
Costs in each coverage phase: After you have paid your deductible, you are in the initial coverage phase, where you generally will pay around 25 percent of the cost of both brand-name and generic drugs until your drug costs total $4,660. You will then be in the coverage gap phase, where you will be responsible for about 25 percent of the cost of your drugs. Once your out-of-pocket drug costs total $7,400 in the coverage gap phase, you will be in the catastrophic coverage phase . At that point, you will pay no more than 5 percent of the cost of your drugs or $4.15 for each generic and $10.35 for each brand-name drug.
If you qualify for a low-income subsidy (LIS) or Extra Help: You will have lower out-of-pocket costs, depending upon the Part D plan you choose and the drugs you use. Around 13 million people with Medicare qualify for extra help with their prescription drug costs. There are 198 Part D drug plans for which you will not pay a premium. You can also choose a “non-benchmark” plan and pay a portion of the monthly premium.
If you need insulin: The Inflation Reduction Act limits your monthly copayment to no more than $35 in all phases of Part D coverage. However, that limit applies only to insulin in a plan’s formulary, not all insulin products.
If you need a vaccine: Vaccine costs are covered in full for vaccines that are on the Part D formulary.
Here’s more from Just Care:
- Prescription drug middlemen, PBMs, will always drive up drug costs
- Six tips for keeping your drug costs down if you have Medicare
- Enrolling in Medicare? Here’s a checklist
- Five ways to ensure the people you love are safe and healthy
- Roundup: Planning for life’s curve balls
