Changes to Medicare taking effect in 2025 are on the horizon. Medicare open enrollment started October 15th and goes through December 7th.
There’s so much information out there – wow! In this post, I’ll try to highlight the key points and encourage you to talk with experienced insurance brokers to help you sort through what’s best for you.
Image by Gerd Altmann from Pixabay
There are two main ways to get your Medicare coverage — Original Medicare or Medicare Advantage (Medicare-approved plans from private companies).
It’s important to understand the differences between these 2 options, so consider these things when choosing coverage. As a result of the Inflation Reduction Act passage in 2022, there are changes to Medicare taking effect in 2025 that you should be aware of.
Starting in 2025, all Medicare plans will include a $2,000 cap on what you pay out-of-pocket for prescription drugs covered by your plan. It’s more important than ever to make sure to compare Part D plans to assess costs and ensure your prescription drugs are covered.
The $2000 cap includes deductibles, copayments, and coinsurance for covered drugs. These out-of-pocket limits do not apply to Part B drugs provided by a medical professional in an outpatient hospital setting. Chemotherapy treatments, for example, may fall into this category.
This is a big deal – no more “doughnut hole” or coverage gap! Yes, if your Medicare Part D or Medicare Advantage Program requires a deductible, you must pay the full cost of your drugs until you meet the 2025 deductible of $590 (up from $545 in 2024).
Here are some other changes to Medicare Part D in 2025:
Insulin coverage Medicare drug plans cannot charge more than $35 for a one-month supply of each Part D-covered insulin.
Initial coverage phase After paying the deductible, enrollees will pay 25% of their drug costs until they reach $2,000 in out-of-pocket spending. When your spending reaches $2000, you move to the catastrophic coverage stage.
The five tiers of initial coverage are Tier 1, preferred generic drugs; Tier 2: generic drugs; Tier 3: preferred brand drugs; Tier 4: nonpreferred drugs; and Tier 5: specialty drugs. (Drug tier copays are different depending on which Part D or Medicare Advantage plan with Part D you have chosen.)
Catastrophic coverage Once enrollees reach $2,000 in out-of-pocket spending, you’ll qualify for catastrophic coverage and will not pay any additional out-of-pocket costs. The shift to $0 out-of-pocket for this stage begins on Jan. 1, 2025. When a beneficiary enters the catastrophic coverage stage, Medicare will pick up all prescription costs, whether brand name or generic, and those with a Part D plan pay $0.
In 2025 you can choose to participate in a program that spreads your out-of-pocket drug costs across the calendar year, instead of paying all at once at the pharmacy. It’s called the Medicare Prescription Payment Plan — and you can opt-in with your plan throughout the 2025 plan year. Contact your plan for more details.
In this Optional payment plan Enrollees can choose to pay their drug copays and coinsurance over time. The amount paid each month will depend on the cost of the drug, the month the prescription was filled, and any premiums or deductibles.
All Part D plans will offer this option for free, but it’s voluntary. If you opt to participate, you must continue to pay your Part D premium throughout the year. You won’t get a bill from the pharmacy. Instead, you’ll get another bill from your Part D plan administrator for this cost. You can learn more about this payment option on Medicare’s website or by checking with your Part D plan provider.
Limits on Telehealth services in 2025. Medicare beneficiaries currently have access to telehealth services from wherever they are. But this will end on Jan. 1, 2025. At that point, Medicare won’t cover most telehealth services unless you’re in an office or medical facility in a rural area.
When using telehealth, you will still be responsible for paying your Part B premium and any applicable co-pays. There are exceptions to these Telehealth changes:
- Monthly End-Stage Renal Disease visits for home dialysis
- Service for diagnosis, evaluation, or treatment of symptoms of an acute stroke wherever you are
- Services to treat a substance-use disorder or co-occurring mental health disorder; or for the diagnosis, evaluation, or treatment of a mental health disorder, including at-home treatment
- Behavioral health services in your home
- Diabetes self-management training
- Medical nutrition therapy
Expanded health-risk assessments at Wellness visit. Screening for signs of dementia, substance-use disorders, and social needs concerns will begin in 2025.
Caregiver training resources cost coverage for family members caring for a senior if your healthcare provider recommends.
Image by Gerd Altmann from Pixabay
Medicare Advantage Program Changes
A congressional advisory panel unveiled research that estimates Medicare managed care plans were paid nearly $193 billion more to care for beneficiaries from 2017 to 2021 relative to the cost of care in traditional fee-for-service Medicare. As such, Centers for Medicare & Medicaid Services continue efforts to phase in a series of MA-plan payment cuts after years of overpayments.
Some Medicare Advantage insurers may pull out of areas, reprice their products, or alter their benefits to enrollees. Check if your Advantage Plan offers Part D Prescription Drug coverage and/or supplemental services as you’ve had in the past.
Check and Double Check
This year it’s important to check and double check what plan you have and if it covers what you expect. I thought it was crazy in the ’90s when I was helping my parents. Whoa, the level of detail and the changes this year are big.
The administrative side of life is something we face throughout our lives. It’s ok to reach out to resources for help. Send me an Email or Message if you have any questions. For additional information about my work check out @ The Living Planner or @ The Living Planner.
If you’re up for planning across life, my book is a resource for you. The Living Planner What to Prepare Now While You Are Living © Check it out HERE.
For those who seek a step-by-step DIY method to review your personal contingency planning readiness: Check it out HERE.
Reminder: There is nothing permanent except change❣️ Lynn
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