Medicare enrollment is open for 2025. Why plans are seeing a big change
Annual Medicare enrollment continues through Dec. 7, and millions of seniors may find choosing a plan more difficult this year than in the past, experts said.
For the first time, out-of-pocket drug costs will be capped at $2,000 annually and all enrollees will have the option to pay those costs in monthly installments instead of all at once pharmacy. These are good things for consumers, especially for those with more access. AARP estimates that by 2025, 3.2 million Americans, or 8.4% of all those with a Part D drug plan, will reach the peak.
But to pay for the changes, insurers are changing their offerings, which may result in fewer benefits for many older people and may also cost them more money, experts said.
Some insurers are cutting plans, exiting “unprofitable” markets, reducing standard offerings such as dental coverage and increasing fees such as deductibles, premiums or co-payments. that all Medicare enrollees pay.
“This year’s Medicare market will be more turbulent than ever,” said Vijay Kotte, chief market officer for Medicare GoHealth. “With fewer options, higher costs, and reduced benefits, seniors will have to navigate one of the most confusing enrollment periods in recent memory.”
How many Americans are involved?
More than 80% of traditional Medicare users purchase a Part D plan. Many also purchase a supplemental plan, known as Medigap or Plan G, so that once the annual premium is met , all out-of-pocket costs such as co-insurance and co-payments are covered. Otherwise, Medicare does not cover 20% of medical costs or prescriptions, and there is no limit on out-of-pocket costs.
Is there a downside to Medicare Advantage?
- Medicare Advantage (MA), which is offered by private insurers, often has $0 or lower monthly premiums but that essentially means “no extra cost,” said Cindy George, executive editor. of personal finance at GoodRx. “You still pay your Medicare Part B premium, and it’s usually deducted from your monthly Social Security payment. MA usually includes all three parts and usually benefits,” he said. of extras like vision, dental and hearing issues or gym memberships.Charges co-pays or co-insurances for almost all services.
- With changes being made by insurers this year, nearly 6 million MA enrollees are expected to face an erosion of their plan’s benefits, which would be the first time, according to Medicare marketplace GoHealth .
- About 1.3 million Americans with MA general enrollment plans will not have those plans available to them by 2025, forcing them to change their Medicare coverage, according to America’s Health Insurance Plans (AHIP), a national nonprofit trade association for health care providers and solutions. . It estimates that 243,000 beneficiaries have plans to enroll with a total of $0 premium MA in 2024 but will have to pay a premium in 2025.
- The number of private Part D plans in 2025 is also down 26% from 2024, according to nonprofit health researcher KFF, as insurers aim to eliminate $2,000 out-of-pocket coverage. of drugs.
Looking for a new strategy
Mary Johnson, 73 years old, is one who must get a new drug policy. He enrolled this year in Aetna’s popular Part D plan for a $5 a month premium, and his three prescriptions are covered before the deductible with a co-pay, he said. That plan, which cost him about $63.60 a year, will be discontinued in 2025.
“In 2025, my least expensive option to replace that policy would result in me increasing my premiums and out-of-pocket costs by $476.00, a total of 750%,” according to the remedies. three of the generics he is currently using, Johnson. that said. Meanwhile, the change in the cost of living of Social Security for 2025 is 2.5%, he noted.
What should Americans consider when choosing a plan?
To save money, experts suggest:
- Create an account at Medicare.gov, then enter your medications, pharmacy and location to compare available plans, providers and drug costs. Mike Ramirez, assistant director of financial planning at EP Wealth Advisors, suggests adding different drugs near you when comparing drug costs. “If you go two blocks to a different pharmacy, you may pay a different price,” he said.
- If drug costs are still too high for you, research assistance programs like Medicare’s Extra Help and Medicare Savings Programs (MSPs) or free discount programs like GoodRx, can save you money versus spending your drug plan. Manufacturer’s storage cards are also an option. Prescriptions that use discount programs like GoodRx won’t count toward the discount, but people who don’t expect to receive a rebate may be better off using the discounts, George said. Others will want to weigh the benefits of using deductibles against insurance and hit deductibles to find a distribution of costs, he said.
- Talk to an expert, like “an insurance broker who represents all the insurance companies, so they’re not biased against anybody,” said Cynthia Pruemm, founder and CEO of SIS Financial Group. Free one-on-one counseling is also available from the State Health Insurance Assistance Program (SHIP) which often works through local agencies on aging, senior centers, and local Departments of Family Services. , Johnson said.
- Part D enrollees can choose, for free, by 2025 to pay for drugs in monthly installments over a year, and everyone should, said Brian Whorley, the software company’s chief executive. of health care Paytient.
“You can hold on to your money for a long time,” Whorley said. “If you are someone who likes to check bills at the end of the month, and you have quality and certainty, then you are interested in this.”
He said that the high price is the main reason why people do not fill prescriptions or give their medicines. Smaller, predictable payments are easier to budget for and will encourage people to stick with medications, he said. All the experts who spoke to USA Today said that there is nothing wrong with choosing this option.
- If you’re considering switching to a Medicare Advantage plan because premiums are lower, be careful, experts said. “Once a Medigap policyholder drops their information, you generally won’t get your policy back if you change your mind later,” Johnson said.
MA out-of-pocket costs are covered annually, but are high and will increase by 2025, AHIP said. The share of plans with high out-of-pocket costs of more than $5,000 will increase to 52% in 2025 from 46% in 2024, AHIP said. With a traditional Medicare plan and a Medigap plan, your annual out-of-pocket cost is the Part B deductible, which is $240 in 2024.
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Also, consider how much you travel and what your provider options are where you live. Traditional Medicare covers almost all doctors and hospitals except hospitals. Medicare Advantage covers network doctors and may require a referral and prior authorization for certain care. “Medicare Advantage can be more difficult if you like to travel because you have to stay in the network,” Pruemm said.
Even though traditional Medicare and Medigap cost more in monthly premiums, “Plan G is profitable,” said Brandon Hill, senior advisor at Beckett Financial Group. “If a supplement fits your budget, then get a supplement.”
Medora Lee is a finance, markets, and personal finance reporter for USA TODAY. You can reach him at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for financial tips and business news every Monday through Friday morning.
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