Expect changes in Medicare this year. Look for higher drug prices, higher co-pays, and even doctors and hospitals being dropped from Medicare Advantage plans

This is a hectic time of the year for Medicare recipients. The ads and the telemarketing phone calls begin, kicking off Medicare Open Enrollment, which offers the 69 million Medicare beneficiaries the opportunity to review their coverages and make changes.

Fast Facts about Open Enrollment

Despite its importance, most people ignore or overlook open enrollment, which runs from Oct. 15 through Dec. 7. That’s a mistake. For both Medicare Advantage and Original Medicare, costs and coverage can change significantly from year to year. Every senior should at least look at their options and not just let their current plan roll over.

What exactly is Open Enrollment and why is it important?

It’s the only time of year that Original Medicare and Medicare Advantage enrollees can make changes to their plans. Original Medicare enrollees can change their Part D prescription plan or switch to a Medicare Advantage Plan. Medicare Advantage enrollees can switch to another Medicare Advantage plan or switch to Original Medicare.

What is the difference between Original Medicare and Medicare Advantage Plans?

Original Medicare is the original health care plan for seniors 65 and older. Medicare Advantage Plans are Medicare plans are operated by private insurers (like UnitedHealthcare and Humana), for Medicare.

Original Medicare costs may be higher, but you have a choice of doctors or hospitals. Also, “If you’re in Original Medicare, you still need to buy some private coverage – prescription drug coverage (Part D) and a Medicare Supplement policy, otherwise known as Medigap,” says Louise Norris, health policy analyst with MedicareResources.org.

Medicare Advantage plans tend to be less expensive but restrict you to doctors and hospitals in those plans. Your doctor may or may not be in the plan. But MA plans generally include dental and vision coverage, which Original Medicare excludes. The percentage of Medicare recipients choosing MA plans are growing rapidly, and today roughly half of Medicare recipients are using them.

One of the biggest issues with the MA is that they require prior authorization. If you are referred to a specialist who is not within the network, you will need prior authorization to make an appointment, or you could end up paying out-of-pocket. This, approval time and paperwork is one of the biggest complaints about MA plans.

What are people most confused about when it comes to Original Medicare?

“When people initially enroll in Medicare, there is a general lack of awareness around the Medigap plans, those Medicare supplement policies,” says Norris. “You only get one chance to enroll in those plans without your medical history being a factor, and that’s when you’re first enrolled in Medicare and you’re at least 65 years old. You have a six-month window to pick a Medigap Plan that will cover some or all of the out-of-pocket costs. Once that six-month window ends, in most states, you will not get another chance to buy a Medigap plan unless there’s a very, very specific qualifying life event.

That means that when your initially make your Medicare decision and decide to go with a Medicare Advantage plan and decide later that you want to switch to Original Medicare, “you might not be able to get a Medigap plan because it will depend on your medical history,” Norris says.

Why would someone want to switch plans?

“A common mistake that we see people make is they pick their coverage initially, when they first go into Medicare, and then just let it ride from one year to the next without actively comparison shopping their Medicare Advantage or their Medicare Part D coverage,” says Norris. “If you don’t do anything during open enrollment, your Medicare Advantage plan will just renew, or your Medicare Part D drug plan will just renew. But the premiums might be higher. The benefits might change. The provider networks might change, the specific drugs that are covered might change, or the out-of-pocket costs for those drugs might change.

“You might end up with a plan that’s much more expensive than it needs to be, or that really isn’t meeting your needs anymore.”

For example, UnitedHealthcare and Johns Hopkins Medicine ended their network contract in August. That means that most Johns Hopkins facilities and providers are now out of network for patients with UnitedHealthcare Medicare Advantage plans. The same could happen your primary care physician.

What is the Annual Notice of Change and why is that important?

In September, you should have received your Annual Notice of Change from your Medicare insurers, by email or regular mail. That document spells out changes in coverage and costs effective next year.

“Whether you’re in Medicare Advantage or Medicare Part D, in September, leading up to the open enrollment period, you get a Notice of Change from your insurance company,” says Norris. “It details all the ways your policy is changing for the coming year – premium changes, provider network changes, benefit changes. “Maybe your deductible is changing, or maybe your daily co-pay for the hospital, if you’re on a Medicare Advantage plan, maybe that’s changing. Anything like that will be detailed in that notice. You then take that into consideration when you’re comparison shopping the other plans that are available.

“If you just ignore that notice and just let your policy renew, you might be surprised when you go say to the pharmacy in January to fill a prescription, all of a sudden, the coverage might be different than what you were used to the previous year,” she says.

Stymied about Medicare?  Join Senior Planet’s Medicare webinar on ‘Navigating Medicare Resources Online” on Wednesday Nov. 26 to learn how to find Medicare information online. (Note: this does not include advice or endorsement of any Medicare enrollment or plans.)  Registration is required; details are here. 

What are the important changes coming for Medicare next year?

This year more insurers than usual are making changes – withdrawing from some states or regions, changing premiums and co-pays and annual deductibles.

Also, the Inflation Reduction Act (IRA) of 2022 enabled Medicare to negotiate prices for the most expensive drugs. The first set of negotiated drug prices go into effect in 2026 and are estimated to save $1.5 billion in annual out-of-pocket costs for Medicare beneficiaries. The negotiated prices are a minimum of 38% off the 2023 list price.

Also, this year, also as a result of the Inflation Reduction Act, there is, for the first time, a cap on your out-of-pocket expenses in Part D Prescription Drug Plans. “Starting this year, in 2025 it for all Part D plans there’s a maximum out of pocket cap of $2,000 for drugs that are covered by the plan. Once you hit $2,000 in out-of-pocket spending, then your drugs that are covered by the plan will just be covered in full for the rest of the year. That cap is increasing next year to $2,100 because it is indexed for inflation.”

Also, Norris says, some drug plans have a deductible. If they do have a deductible, the maximum that it can be this year is $590 and next year that’s increasing to $615.

“Again, this is where people need to look at the notice they get from their plan, because not all plans will increase their deductible to that maximum $615, but some of them will,” Norris says. So, pay attention.”

YOUR TURN

What do you think about the changes in Medicare? Are you in an Advantage Plan or in Original Medicare?  Let us know in the comments!

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Rodney A. Brooks is an award-winning journalist and author. The former Deputy Managing Editor/Money at USA TODAY, his retirement columns appear in U.S. News & World Report and Senior Planet.com. He has also written for National Geographic, The Washington Post and USA TODAY and has testified before the U.S. Senate Special Committee on Aging. His book, “The Rise & Fall of the Freedman’s Bank, And Its Lasting Socio-economic Impact on Black America” was released in 2024. He is also author of the book “Fixing the Racial Wealth Gap.” His website is www.rodneyabrooks.com

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