COLUMN: Changes are coming to Medicare
The first two weeks in August were exceptionally busy in terms of news. But there was one very important piece of news that will have an impact on almost all of the 64 million people who are on …
COLUMN: Changes are coming to Medicare
The first two weeks in August were exceptionally busy in terms of news. But there was one very important piece of news that will have an impact on almost all of the 64 million people who are on Medicare, the passage of the Inflation Reduction Act of 2022 (ACT). While not all the provisions of this legislation will take effect immediately, many will go into effect on Jan. 1, 2023.
Provisions of the act taking effect in 2023
The ACT passed the House on Aug. 12 after passing the Senate earlier in the week. The president signed the legislation on Aug. 16 and is scheduled to hold a formal signing ceremony at the White House in September. Here are some of the major provisions of the ACT that will become effective on Jan. 1 or before.
• Cap on insulin costs. Although Congress failed to enact a cap on insulin costs covered by private insurance companies for those not yet on Medicare, the ACT does cover those on Medicare. Beginning in January, the monthly cost of insulin paid by Medicare beneficiaries will be capped at $35 a month. According to the National Academy of Social Insurance, an estimated 3.3 million people will benefit from this provision.
• Ceiling on Part D premium increases. With inflation running at a 40-year high, Part D premiums could skyrocket in 2023. However, under the provisions of the ACT, Part D premiums can not increase more than 6 percent a year through 2029.
• Changes for extra help. AARP reports that the income threshold for beneficiaries to qualify for extra help with paying for Part D out-of-pocket costs will increase. For 2023, the cut-off point has been increased from the current rate of 135 percent of poverty ($18,347) to 150 percent of poverty ($20,385) for an individual.
• Vaccine coverage. In last month’s article I wrote that vaccines, such as those for COVID-19, that are covered under Medicare Part B do not require any co-payment. However, vaccines covered under a Medicare Part D drug plan may require some co-payments. According to the analysis by AARP, under the ACT starting on Jan. 1, beneficiaries will no longer have to pay any co-payments for the over 25 vaccines that are recommended by the Advisory Committee on Immunization Practices.
For example, the shingles vaccine, which is covered by Part D and requires a co-payment on many plans, will now be available for free. For a full list of all the vaccines that will now be covered without a co-pay go to the Centers for Disease Control and Prevention webpage (www.CDC.gov/vaccines).
• Inflation rebate. According to AARP, beginning in October of this year, if the price of a drug covered under Part D is raised more than the general rate of inflation, the drug maker must rebate to Medicare the amount of their price increase that exceeded the rate of inflation. If the medication is covered under Part B, this provision will begin in January.
Provisions taking effect after 2023
• Out-of-pocket drug costs. Currently Medicare Part D drug plans have what is known as a catastrophic cost limit of $7,050. Once out-of-pocket drug costs reach this level, beneficiaries pay 5% of subsequent drug costs. Beginning in 2025, once a Medicare beneficiary’s out-of-pocket drug costs reach $2,000 for the year all co-insurance costs are eliminated.
Medicare will then pay 40 percent of the cost of generic drugs and 20 percent of the cost of brand name medications. Your drug plan must cover the rest. According to the Kaiser Family Foundation, this provision will be a tremendous savings for millions of beneficiaries, especially those taking expensive medications to treat such things as cancer and multiple sclerosis.
• Negotiation of drug prices. According to the reports by AARP, the new legislation authorizes the Secretary of Health and Human Services to begin next year to negotiate prices of 10 high-cost medications that are not named in the bill. These negotiated prices will not take effect until 2026 if the drugs are covered under Part D plans and 2028 if covered under Part B. The number of drugs covered would increase each year so that by 2029, 60 of the highest cost drugs would be the subject of price negotiation.
COVID-19. On Aug. 11, the CDC released new and somewhat relaxed guidelines for preventing the spread of COVID-19. The changes mainly focus on what to do if you have been exposed or test positive for the virus. The guidelines are listed on the CDC website (www.cdc.gov). While most counties in the area are now experiencing low transmission rates, the best protection against severe illness from COVID-19 remains being fully vaccinated and boosted. And, if you feel unsafe, do not hesitate to wear a mask.
HIICAP in Oneida County. HIICAP counselors from the Oneida County Office for Aging/Continuing Care are available to assist you in providing more information about Medicare and all insurance related questions:
The Oneida County HIICAP Office is continuing to provide counseling services and in-person scheduling by phone as they have throughout the pandemic. If you would like to do a HIICAP counseling session over the phone or schedule an appointment at one of the two in-person locations call 315-798-5456 and select #2 from the choice list. In most cases you will be asked to leave your contact information on a voice mail and a staff member will return your call within 72 hours (3 business days).
• Copper City Community Connection, 305 E. Locust St., Rome will offer assistance on Thursday afternoons. The HIICAP program will also be scheduling at Copper City.
• North Utica Senior Citizens Center, 50 Riverside Drive, Utica has hours of operation from 9 a.m. to 3:15 p.m. on Friday only. Sessions are expected to run 45 minutes. Call the HIICAP office to schedule an appointment.
• Contacting HIICAP programs in other counties. Here is the contact information for HIICAP programs in several counties that border Oneida County. To reach the Madison County HIICAP program call 315-697-5700 and ask to speak to a HIICAP counselor. For Herkimer County, call Catholic Charities of Herkimer County at 315-894-9917. For Lewis County call 315-376-5013 and select No. 2 from the choice list.
Dr. William Lane is the owner of William Lane Associates, a gerontological consulting firm located in Homer, N.Y. He writes a monthly column on HIICAP related issues for the OFA. Dr. Lane does not sell insurance, work for any insurance company or recommend any insurance products.
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