Medicare’s Annual Election Period has always been important, perhaps even the most important time of year for beneficiaries. And yet, this year, it’s become even more important. If you’ve ignored AEP in the past, we highly encourage you not to do the same thing this year!
This year’s AEP will be quite different than those of past years. Recent changes made present by the Inflation Reduction Act of 2022 have caused insurance carriers to make major changes.
How Medicare Part D Is Changing in 2025
We’ve already seen a couple of small changes in Part D plans over the last couple of years. The change in 2025 is going to be even more significant. This year (2024), there was an $8,000 limit on out-of-pocket prescription costs for Medicare beneficiaries. In 2025, that number is going down to $2,000 – quite the savings for beneficiaries who take many (or expensive) medications.
Sounds like a good thing, doesn’t it? It is, but unfortunately, the insurance carriers will find a way to recuperate this money. On top of the out-of-pocket costs, the insurance carriers will now be responsible for picking up 60% of the expenses when the beneficiary has reached their out-of-pocket limit. This year, that number was only 20%. Insurance carriers will be taking a major hit.
So, what will the insurance companies do? We’re expecting to see a few things from the carriers this year. First, an increase in monthly premiums. In 2024, the average premium was around $35 per month. It won’t be surprising if that number doubles in 2025. Second, there could be big changes in the drug formularies. The carriers may remove some prescriptions from their formulary, forcing the beneficiary to pay for all costs themselves. Third, there might be more restrictions such as prior authorizations, step therapy, and quantity limits. All of these will result in higher costs to the beneficiary.
How Medicare Advantage is Changing in 2025
Medicare Advantage plans will go through similar changes. The plans that have prescription drug coverage included in their benefits should expect to see similar changes as the stand-alone Part D plans.
Carriers may also implement other cost-saving measures when it comes to Medicare Advantage plans. An increase in premium and beneficiary costs will likely increase. Or, they may limit benefits as they may with the drug formularies. It’s likely that most of the benefit cuts will occur within the extra benefits like dental, vision, and hearing benefits. Medicare Advantage plans that include a Part B giveback may lessen or eliminate that benefit.
Lastly, some insurance carriers may choose to remove themselves from the market, or at least reduce the number of plans they offer. This will result in fewer choices for the beneficiary.
Review Your Medicare Plans Now!
This might all sound like bad news for Medicare enrollees, but it just means that you’ll need to evaluate what’s most important to you. Would you prefer lower costs and lower benefits? Or more benefits and higher costs? Decide which is most important to you and consider that when shopping for new Medicare plans this year.
Make this process easier on yourself and schedule an appointment with your Medicare advisor at Carolina Senior Benefits! We’re here to answer all your questions and guide you through this AEP. Call to schedule your consultation today.
