By Matthew Gaude & Shawn McGuire
If you’re eligible for Medicare, you’ve likely received a barrage of notifications about open enrollment. While it may be easy to overlook them as junk or spam, ignoring open enrollment is a big mistake. With recent legislative updates, and other changes to the Medicare premiums in 2023, reviewing your coverage is crucial. Here’s what you need to know to make the most of your Medicare open enrollment.
2023 Medicare Changes
Medicare coverage is divided into 4 parts, each with its own coverages and premium payments. Below is an overview of what each part covers and the upcoming changes for 2023.
Part A
Also known as hospital insurance, Medicare Part A covers inpatient hospital care and some nursing care coverage. If you or your spouse paid Medicare payroll taxes for at least 10 years, Part A is free for you. If you didn’t, you can still get coverage by paying a monthly premium.
In 2023, the deductible and coinsurance requirements for Part A services will increase to:
- $1,600 per benefit period for the first 60 days of inpatient hospital care
- $400 per day for days 61-90 spent in a hospital
- $800 for lifetime reserve days
- $200 per day for days 21-100 spent in a skilled nursing facility
Part B
Part B is medical insurance coverage for some medical conditions and preventative care, including doctor visits and other outpatient services. You will pay a monthly premium for Part B coverage. Together, Parts A and B are known as Original Medicare.
Thanks to lower-than-expected spending on Part B services in 2022, the premium for this coverage will be dropping by 3% in 2023. Beneficiaries enrolled in Medicare Part B can expect to see the standard monthly premium drop to $164.90, down from $170.10 in 2022. Annual deductibles will also drop to $226, down from $233.
Keep in mind that if your modified adjusted gross income (MAGI) from 2021 exceeds certain levels, you will be subject to an additional premium charge called the Income Related Monthly Adjustment Amount (IRMAA). For 2023, the IRMAA additional premiums are:
| MAGI – Single Taxpayers | MAGI – Married Filing Jointly | IRMAA Premium (Part B) |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 |
| Between $97,000 and $123,000 | Between $194,000 and $246,000 | $65.90 |
| Between $123,000 and $153,000 | Between $246,000 and $306,000 | $164.80 |
| Between $153,000 and $183,000 | Between $306,000 and $366,000 | $263.70 |
| Between $183,000 and $500,000 | Between $366,000 and $750,000 | $362.60 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | $395.60 |
Part C
Known as Medicare Advantage Plan, Part C is an alternative to Original Medicare that is offered through Medicare-approved private companies. This plan bundles Part A and Part B and often includes Part D as well. Medicare Advantage plans also often cover additional services not covered by Part A, Part B, or Part D, including vision, hearing, and dental visits.
Part D
This optional private insurance add-on includes drug coverage. Part D has a late enrollment penalty. So even if you don’t need prescription coverage when you are first eligible for Medicare, it usually makes sense to enroll in the plan to avoid extra long-term costs.
The 2023 deductible for Part D is $505, up from $480 in 2022.
The Inflation Reduction Act has created several important changes to Medicare Part D, some of which are slated to take effect in 2023. These include:
- Caps on insulin costs: As of January 1, 2023, all Medicare Part D plans will have a $35 monthly cap on what beneficiaries will pay for insulin. Additionally, deductibles will not be required for this cap to take effect.
- Improved vaccine coverage: Recommended vaccines will be fully covered under Medicare Part D starting in 2023.
- Catastrophic coverage coinsurance: Currently, there is a 5% coinsurance charge for catastrophic coverage. This charge will be eliminated starting in 2024.
- Capping out-of-pocket costs: In 2025, beneficiaries will have a $2,000 annual cap on Part D out-of-pocket expenses.
- Price negotiation: Starting in 2026, Medicare will be able to directly negotiate the price of some prescription drugs.
Lastly, the IRMAA additional premiums also apply to Part D coverage:
| MAGI – Single Taxpayers | MAGI – Married Filing Jointly | IRMAA Premium(Part D) |
| Less than or equal to $97,000 | Less than or equal to $194,000 | $0.00 |
| Between $97,000 and $123,000 | Between $194,000 and $246,000 | $12.20 |
| Between $123,000 and $153,000 | Between $246,000 and $306,000 | $31.50 |
| Between $153,000 and $183,000 | Between $306,000 and $366,000 | $50.70 |
| Between $183,000 and $500,000 | Between $366,000 and $750,000 | $70.00 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | $76.40 |
Your Enrollment Options
Your enrollment options depend on which stage of the Medicare process you’re in.
If you’re a pre-retiree thinking about enrollment, you should expect to sign up in the six months surrounding your 65th birthday (three months before and three months after). If you’re receiving Social Security benefits at that time, you will be automatically enrolled in Medicare Part A and Part B. Additional coverages like Part D, Medigap, and Medicare Advantage will have to be enrolled separately. If you’re not receiving Social Security when you turn 65, you will have to apply for Medicare through the Social Security Administration website.
If you’re retired and already enrolled in Medicare, you should expect to review your benefit options every year. This year, Medicare open enrollment began on October 15th and remains open through December 7th. The decisions you make during this period will affect your 2023 Medicare coverage. It’s a daunting task, but Medicare costs and coverage levels change annually so it’s important that you stay up to date.
The open enrollment period affects each part separately. Here’s what you can do with your Medicare coverage:
- If you have Medicare Parts A & B, you can switch to Part C.
- If you have Medicare Part C, you can switch back to Original Medicare or change to a different Medicare Advantage Plan.
- If you have Part D, you can switch to a different Part D plan or drop your prescription drug plan.
You can also use this time to enroll in Part C and Part D for the first time.
How We Can Help
If you are feeling overwhelmed, you are not alone! There is a lot to consider when it comes to choosing the right Medicare coverage. That’s why we’re here to help. At Live Oak Wealth Management, we help Medicare recipients feel confident in their plan decisions. If you’ve got questions about your current Medicare plan, or you’d like help navigating the enrollment process, reach out to us today. Set up a complimentary appointment by calling our office at 770-552-5968 or emailing [email protected]. Or, if you prefer, you can simply click here to schedule an appointment online.
About Matthew
Matthew Gaude is an *investment advisor representative and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. Working first as a commodity broker and then as a Business Development Manager for a national broker-dealer in previous jobs, he has the insight and experience to help clients understand the complexities of the market and implement strategies to minimize risk. To learn more about Matthew, connect with him on LinkedIn or visit www.liveoakwm.com.
About Shawn
Shawn McGuire is a financial advisor and the co-founder of Live Oak Wealth Management, a financial services firm in Roswell, Georgia. He serves the planning and investment needs of corporate employees, those approaching or in retirement, and 401(k) plan sponsors. He has worked in financial services since 2002 in positions ranging from financial advisor to stock broker and portfolio manager. As a CERTIFIED FINANCIAL PLANNER™ professional, he is trained to help clients with virtually all their financial needs. To learn more about Shawn, connect with him on LinkedIn or visit www.liveoakwm.com.
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