23 Oct 2024 It’s Annual Election Period – Why Should I MediCare?

Medicare plans have much bigger changes for 2025 than they’ve had in recent years. If you are Medicare eligible, this is the time to take a closer look at your plans and make sure they are the best to meet your healthcare needs in 2025. The Annual Election Period started last week and runs through December 7th. Any changes you make go into effect January 1.

Here’s an overview of the key points regarding Medicare changes in 2025 and action items for all Medicare beneficiaries.

Major Changes in 2025

Part D Structure Changes: Medicare Part D prescription drug coverage has some of the biggest changes from 2024 to 2025. This is largely due to the Inflation Reduction Act of 2022 which introduced changes aimed at reducing costs for beneficiaries. There is no longer a “donut hole” of coverage due to these overall structure changes. Here is the new, simpler structure:

• Deductible: If your plan has a deductible, you pay the full cost of your covered prescriptions until you hit the deductible.
• Initial coverage: You pay coinsurance for your covered prescriptions until you reach the new out-of-pocket cap of $2,000. It’s important to note that your premiums and any prescriptions under part B or not covered by your plan do NOT count towards meeting your $2,000 out-of-pocket cap.
• Catastrophic coverage: You have $0 cost sharing after the $2,000 cap for covered medications.

To accommodate for the new prescription cap, Part D plans can increase premiums up to $35/month more than 2024 premiums. Also, be mindful that companies eliminated some plans, so there are fewer Part D plans offered.

Part D Payment Plan Option: There is a new option to smooth out your prescription costs, which may help with cash flow if you expect to hit the $2,000 cap early in the calendar year. This is completely voluntary and shifts you from paying at the pharmacy to paying a monthly bill from your plan.

Prescription Drug Price Negotiation: 10 brand-name Part D drugs had costs renegotiated, aimed to lower out of pocket costs of certain high-cost brand name medications.

Medicare Advantage Program Changes: Medicare Advantage is an alternative to original Medicare. You can switch between the two during open enrollment, but this is not a decision to take lightly as it requires health questions. The WSJ recently highlighted some of the major changes for 2025. Premiums for Advantage plans may be lower next year while other costs of the plan might rise. You will want to review the specific details of your plan, especially the max out-of-pocket cost. Additionally, some hospital systems may be leaving Medicare Advantage plan networks, so it is important to check with your specific healthcare providers to see if they remain in network. Medicare Advantage plans should also send a letter to beneficiaries in the middle of 2025 about any unused benefits.

How to Review Your Coverage

The best place to start is by reviewing your Annual Notice of Changes Letter. This may be a massive packet of information but there should be a summary letter noting key changes to your in-network provider list, in-network pharmacy list, drug list, and cost changes. Questions to think about include…

• Are your medications covered?
• Are there any coverage restrictions or tier changes of the drugs you use? This could result in new prior authorization requirements or quantity limits.
• Did your monthly premium or deductible change?

Once you have an idea of what is changing, you can go to Medicare.gov to review medications and plan options. Or, you can work with an unbiased agent who can help you run through all your medications and see which plan is the best fit for you. We have both local and national resources to assist you.

The broader Medicare changes for 2025 aim to reduce medication costs and expand access. You want to make sure you understand how your coverage and costs are impacted by industry changes. Some plans may have only minimal changes while others have significant ones, and we don’t want you to be caught off guard after open enrollment when it’s too late to make any changes.

As always, let us know how we can help.

The content above is for informational and educational purposes only. The links and graphs are being provided as a convenience; they do not constitute an endorsement or an approval by Beacon Wealthcare, nor does Beacon guarantee the accuracy of the information.