With the Medicare Annual Enrollment Period for 2025 now in full swing, you should be aware of significant changes coming to Medicare Advantage and Part D drug plans that will require that you are extra careful when setting your coverage.
In response to rapidly climbing health care costs, MA insurers are making changes to their plans, including raising deductibles and reducing the size of the network of doctors their policyholders can see.
As well, some MA plans are disappearing altogether, which will affect some 1.5 million seniors, according to Healthpilot, a Medicare-oriented website.
Additionally, due to significant changes to Medicare Part D plans, including lowering the out-of-pocket maximum to $2,000, insurers are also making significant changes, including pulling out of the market. Many of the plans going into 2025 are raising rates and deductibles and covering fewer medications.
The above developments mean that you’ll have to be meticulous to ensure that you still have access to your doctor and preferred medications and that you choose a plan that is affordable.
Medicare Advantage
These popular plans that offer an alternative to Original Medicare are typically set up like traditional health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Over the years, MA plans have grown in popularity and there are many that offer extra perks and benefits like gym memberships or dental coverage.
Plans will vary between insurers, including doctor networks, deductibles, premiums (many have zero premium plans) and extra benefits.
But with cost pressures rising and new rules imposed by the Centers for Medicare & Medicaid Services, things are changing for 2025, and insurers are taking action, including:
- Closing plans.
- Dropping or narrowing the physician networks they contract with (also many hospitals are dropping out of MA plan networks on their own due to low reimbursement levels and rising health care delivery costs).
- Cutting back on perks and additional benefits.
- Increasing deductibles and other out-of-pocket costs, such as copays.
Healthpilot estimates the average MA plan total out-of-pocket maximum is jumping $450 to about $5,929 for 2025 (the figure is for in-network care only).
Part D
Part D is undergoing substantial changes that have many insurers concerned about drug outlays in 2025 and beyond. The biggest change is a $2,000 cap on out-of-pocket expenses for prescription drugs that are covered by the insurer. This massive increase in liability has prompted Part D carriers to:
- Drop plans (Healthpilot estimates that about 3.5 million seniors will see their Part D plan eliminated for 2025).
- Increase deductibles substantially.
- Move drugs to different tiers that require the policyholder to cover more of the cost.
- Hike premiums.
The takeaway
If your MA has been discontinued or your plan no longer includes your preferred doctor in its network, we will have to help you shop around for a replacement plan for 2025.
The same goes if your Part D plan will no longer be available, or if your plan’s formulary no longer includes a drug you take regularly to manage a condition.
If either of the above has happened, please give us a call so we can help you find a plan that includes your preferred local hospital system and doctor, or covers your preferred medication.
If you are considering leaving MA for Original Medicare, you should be aware that while you’ll have access to any doctor that accepts Medicare, there is no out-of-pocket maximum for these plans.
In that case you may want to consider a Medicare Supplement (Medigap) plan, but they can be hard to qualify for if you don’t sign up for one when you first are eligible for Medicare.
Medigap plans cannot reject you when you first sign up for Medicare but if you do so after that point, you may be subject to health reviews and can be denied for any reason.
