CMS Announces 2023 Medicare Part D Parameters

On April 4, 2022, CMS released the 2023 parameters for the Medicare Part D prescription drug benefit. This information is used by employers to determine whether the prescription drug coverage offered by their group coverage is creditable or non-creditable. To be creditable, the actuarial value of the coverage must equal or exceed the value-defined standard Medicare Part D coverage provides.

For 2023, the defined standard Medicare Part D prescription drug benefit is:

• Deductible: $505 (increase from $480 in 2022)
• Initial coverage limit: $4,660 (increase from $4,430 in 2022)
• Out of pocket threshold: $7,400 (increase from $7,050 in 2022)
• Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries not eligible for the coverage gap discount program: $10,516.25 (increase from $10,012.50 in 2022)
• Estimated total covered Part D spending at the out-of-pocket expense threshold for those eligible for the coverage gap discount programs: $11,206.28 (increase from $10,690.20 in 2022)
• Minimum cost-sharing under catastrophic coverage benefit: $4.15 for generic/preferred multi-source drug (increase from $3.95 in 2022) and $10.35 for all other drugs (increase from $9.85 in 2022)

Employers should use these 2023 parameters for the actuarial determination of whether their plans’ prescription drug coverage continues to be creditable for 2023.

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