Medicare’s annual enrollment runs through Dec. 7, and millions of seniors may find choosing a plan much more difficult this year than in the past, experts said.
For the first time, out-of-pocket costs for prescription drugs will be capped at $2,000 per year, and all enrollees will have the option to pay these costs in capped monthly installments rather than paying them in full at the pharmacy. Masu. These are positives for consumers, especially those who are maxed out. AARP estimates By 2025, 3.2 million Americans, or 8.4% of Americans with Part D drug plans, will reach the cap.
But to pay for the changes, insurance companies are adjusting their offerings, which could result in fewer benefits and more costs for many seniors, experts say.
Some insurers have cut plans, pulled out of certain “unprofitable” markets, cut popular products like dental insurance, and reduced fees such as deductibles, premiums and copays that all Medicare enrollees pay. is being raised.
“The Medicare market is going to be more chaotic this year than ever before,” said Vijay Kotte, chief executive officer of GoHealth. “With fewer options, higher costs, and reduced benefits, seniors will be forced to weather the most disruptive enrollment season in recent memory.”
How many Americans are affected?
More than 80% of traditional Medicare customers purchase Part D plans. Many people also purchase an additional plan known as Medigap or Plan G. This covers all out-of-pocket costs, such as coinsurance and copays, once the annual deductible is met. Otherwise, Medicare does not cover 20% of medical costs or prescriptions, and there are no out-of-pocket limits.
Is there a positive side to Medicare Advantage?
- Medicare Advantage (MA) offered by private insurance companies often advertises $0 or low monthly premiums, but that actually means “no additional premiums,” according to GoodRx. says Cindy George, senior personal finance editor. “You continue to pay your original Medicare Part B premiums, which are typically deducted from your monthly Social Security payment,” she said. MAs typically include all three parts and often include additional benefits such as vision, dental, and hearing coverage and gym memberships. We charge co-pays or co-insurance for almost all services.
- According to Medicare marketplace GoHealth, about 6 million MA members are expected to face reductions in their insurance plan benefits this year due to changes being made by insurers this year, the first of its kind in history.
- Approximately 1.3 million Americans with MA open enrollment plans will no longer have access to those plans in 2025 and will be forced to change their Medicare coverage. According to the American Health Insurance Plans (AHIP)a national nonprofit trade organization for healthcare providers and solutions. We estimate that 243,000 beneficiaries will be enrolled in MA general enrollment plans with $0 premiums in 2024, but will need to pay premiums in 2025.
- The number of stand-alone Part D plans in 2025 is also down 26% from 2024. According to nonprofit health researcher KFFBecause insurance companies aim to offset the $2,000 drug copay cap.
looking for new plan
Mary Johnson, 73, is one of those who must find a new drug plan. This year, she enrolled in the popular Aetna Part D plan, which costs $5 a month in premiums and provides access to three types of generic prescriptions with zero copays and no deductibles. The plan cost about $63.60 per year and is scheduled to be phased out in 2025.
“In 2025, choosing the lowest cost alternative to that plan would increase your premiums and copays by $476.00, for a total increase of 750%,” Johnson said. Calculations are based on the same three generic drugs. Said. Meanwhile, the cost-of-living adjustment rate for Social Security in 2025 is 2.5%, she noted.
What should Americans consider when choosing a plan?
To save money, experts suggest the following:
- Please create an account at Medicare.govthen enter your drug, pharmacy, and location to compare available plans, providers, and drug costs. Mike Ramirez, associate director of financial planning at EP Wealth Advisors, suggests adding a variety of nearby pharmacies when comparing drug costs. “If you go to a pharmacy two blocks away, you might pay a different price,” he says.
- If drug costs are still too high, research assistance programs are available: Medicare special assistance and Medicare Savings Program (MSP) Alternatively, a free discount program like GoodRx may save you money over a prescription drug plan. Manufacturer savings cards are also an option. Prescriptions through discount programs like GoodRx don’t count towards your deductible, but people who don’t expect to meet their deductible may want to take advantage of the discount, George said. Some people may want to weigh the benefits of taking advantage of a discount versus having insurance and want to hit a deductible to help cover costs, she says.
- Cynthia Plume, Founder and CEO of SIS Financial Group “No,” he says. Free individual counseling is also available here. State Health Insurance Assistance Program (SHIP) Johnson said the organizations often operate through local agencies such as senior centers, senior centers and local family services departments.
- Part D enrollees will be able to choose to pay for their drugs in annual monthly installments for free in 2025, so everyone can do so, said Brian Worley, CEO of healthcare software company Patient. said it should.
“You can keep your money for longer,” Worley says. “If you like looking at your bill at the end of the month and value predictability and certainty, you’ll be interested in this.”
He said high prices are the main reason people don’t fill prescriptions or ration drugs. Smaller, more predictable payments would make budgeting easier and encourage people to stick with their medications, he said. All the experts USA Today spoke to said there are no downsides to choosing this option.
- Experts say you should be careful if you’re considering switching to a Medicare Advantage plan because of lower premiums. “Once a Medigap insurance owner terminates coverage, they typically cannot get it back, even if they later change their mind,” Johnson said.
There is an annual cap on MA’s out-of-pocket costs, but the costs are high and will rise in 2025, AHIP said. According to AHIP, the percentage of plans with maximum out-of-pocket costs over $5,000 will rise from 46% in 2024 to 52% in 2025. For traditional Medicare insurance with a Medigap plan, your annual out-of-pocket cost will be your Part B deductible, which will be $240 in 2024.
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Also, consider the cost of your trip and your provider options where you live. Traditional Medicare covers almost all doctors and hospitals without a referral. Medicare Advantage covers in-network physicians and may require a referral or prior authorization for some care. “For people who like to travel, Medicare Advantage can be more of a hassle because you have to stay in-network,” Plume says.
Even if traditional Medicare and Medigap have higher monthly premiums, “Plan G has more benefits,” said Brandon Hill, a senior adviser at Beckett Financial Group. “If supplements are in your budget, buy them.”
Medora Lee is USA TODAY’s money, markets and personal finance reporter. She can be reached at the following address: [email protected] and Subscribe to the free Daily Money newsletter Get personal finance tips and business news every Monday through Friday morning.
