Paying attention to these changes can help you decide whether you still have the coverage you need — or if it’s time to make adjustments.
The broad rules of Medicare don’t change often, but adjustments happen every year. And some of those changes could significantly affect your coverage and costs.
“It’s good to pay attention to the changes, because depending on what they are, you might want to evaluate your current coverage and consider getting a different plan,” says David Armes, principal of Dover Healthcare Planning LLC, a fee-only Medicare adviser in Long Beach, California.
Armes points to data from the Kaiser Family Foundation, which found that less than 15% of people voluntarily switch private Medicare plans in any given year. This is despite the fact that they can do so during Medicare’s Annual Enrollment Period (AEP), which runs from Oct. 15 to Dec. 7.
You can find out about updates to your specific Medicare plan in the Plan Annual Notice of Change, which must be sent every September to notify participants of changes that start Jan. 1 of the coming year. But in recent months, several changes have been made to the program’s overall rules and coverage that likely will affect many Medicare enrollees. Here are five recent changes worth knowing about.
1. The “donut hole” has closed
Medicare Part D prescription drug plans used to have a huge “donut hole” (officially known as the “Coverage Gap”). You entered the donut hole once you and your plan spent a certain amount each year. Once you entered the Coverage Gap phase, Part D plans would stop paying for drugs until you reached the Catastrophic Coverage phase. But every year since 2010 — when the Affordable Care Act was passed — the donut hole has gotten smaller. By 2020, it was closed completely.
Here’s how that affects costs: In 2010, you would have paid 100% of your drug costs out of pocket once you hit your annual coverage limit. In 2020, that share fell to 25% —which is the same amount you spent before entering the coverage gap. In 2023, after you and your plan spend a combined $4,660 on covered medications, you continue to pay 25% of drug costs. But now, the drug manufacturer begins contributing to the cost of your prescriptions instead of you and your Part D plan shouldering all the cost.
And there’s more relief: Once you spend $7,400 in out-of-pocket costs on drugs in a year, you enter the “Catastrophic Coverage” phase. At this point, you’ll only pay a few dollars for covered prescriptions for the rest of the year.
2. Telehealth is now covered
Before the COVID-19 pandemic, Medicare covered only certain telehealth services for people living in rural areas. But early in the pandemic, the program began offering telehealth coverage to every Medicare beneficiary, no matter where they lived, so they could avoid unnecessary in-person contact. That rule was extended in April 2021.
This is welcome news due to the rising popularity of telehealth, which allows patients and providers to meet virtually, usually through video chat. A survey by the Kaiser Family Foundation found that 27% of Medicare and Medicare Advantage beneficiaries had a telehealth visit between summer and fall of 2020. That number jumped to 45% among beneficiaries who said their providers offered telehealth.
3. Premiums, deductibles, and co-pays keep rising
As is the case most years, the premiums, deductibles, and co-pays for Original Medicare increased again for 2021. Here are a few examples of how they’ve changed:
Medicare Part B:
- Premium: The standard monthly premium for Part B — which covers preventive and medically necessary services — rose to $164.90 for 2023, up from $170.10 in 2022. (Keep in mind that even if you have a Medicare Advantage plan, you still generally pay the Part B premium.)
- Deductible: The deductible for Part B rose to $226 for 2023, up from $233 in 2022.
Medicare Part A:
- Premium: Most beneficiaries don’t pay a premium for Part A, which covers services such as hospitalization and hospice, but those who do saw their premiums go up, depending on their work history. For example, the premium for someone with fewer than 30 quarters of work history rose to $506 a month, up from $499 in 2022.
- Deductible: The deductible for Part A rose to $1,600 per benefit period in 2023, up from $1,566 in 2022.
4. COVID-19 costs are still covered (for now)
Since early in the pandemic, Original Medicare and private Medicare Advantage plans have had to cover the costs of COVID-19 testing and treatment under public health emergency declarations from the Centers for Medicare and Medicaid Services.
This coverage — which continues for now — includes the full cost of testing for COVID-19 under Medicare Part B and hospitalization under Medicare Part A, including some authorized therapeutic treatments, such as remdesivir. Medicare Advantage plans, which replace Medicare Parts A and B, must provide the same coverage.
5. People with end-stage kidney disease are now eligible for Medicare Advantage
The majority of people who enroll in Medicare are age 65 and older, but the government allows people under 65 with certain conditions to enroll as well. These conditions include permanent disabilities and end-stage renal disease (ESRD), a kidney condition that requires either dialysis or a kidney transplant.
Until late 2020, however, people with ESRD could sign up for a Medicare Advantage plan only if they developed the condition after they were enrolled in Medicare. But now anyone with ESRD can enroll in an Advantage plan.
That means people with ESRD can now benefit from the more robust coverage that Advantage plans offer.
Staying in the know about changes to Medicare and your specific plan can pay off — literally. That’s why it’s worth checking to see if these changes affect your coverage and, if so, whether it makes sense to switch to a different plan.
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