As of right now, people who are eligible for Medicare can sign up for the service. Soon, they will have to decide whether to keep getting the service they currently have or change how their medical coverage works. There have been changes made to how the program works, which means that the price of the service they get will change.

How does Medicare work

Medicare gives most people over 65 two basic but complete ways to get care: Part A covers hospital insurance, and Part B covers prevention and outpatient care costs.

Part A is usually covered by the program without extra costs as long as the person who is qualified paid Medicare taxes while they were working. However, hospital stays may have deductibles. People who get Part B must pay a monthly fee in order to use the service.

The normal monthly premium for 2024 is $174.70, but it can be more if the person receiving the insurance makes a lot of money. There is also a yearly deductible of $240 that needs to be paid. This means that beneficiaries pay about 20% of the real cost of the service that they would have to pay for themselves.

The service has two more parts. Part C, also known as Medicare Advantage, is offered by private health insurance companies but is highly regulated by the Social Security Administration.

The cost of Part C can change based on the type of coverage bought, the state, and the insurance company offering it. Part C doesn’t always work with Medicare Parts A and B, Medicaid, or insurance through your job, so be careful when you buy this insurance.

Part D of Medicare pays for the cost of prescription drugs. It is the last legal part of Medicare. This is the only part of the program that we know will get a lot bigger in 2025.

With the new limit of only $2,000 that people will have to pay out of pocket for prescription drugs, insurance companies will raise their rates to make sure that the new limit doesn’t hurt their bottom line.

The Rise in prices of Part D premiums

Eight states—Alaska, California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island, and Vermont—will have to pay much more for prescription drugs than they did in the past. In the past, these states paid very little, sometimes as little as $0.50 a month, or $6 a year in 2024.

People who have been on Centene’s (CNC) Wellcare Value Script plan have had the lowest rates in the past because it mostly covers generic drugs. In some of these states, its customers will have to pay premiums that are more than 500% higher in 2025 if they want to keep being covered under the same terms.

Taking a look at the real prices that have been released for two blood pressure medicines, the yearly premium in Alaska will go from $42 in 2024 to $267.60 in 2025, which is a 537% rise. The most dramatic rise will happen in California, where the premium will go from $4.80 in 2024 to $208.80 in 2025—a 4,250% increase that has never been seen before.

The rates in Connecticut, Massachusetts, Rhode Island, and Vermont will all go up from $6 a year in 2024 to $148.80 a year in 2025. This is a 2,380% rise. On the other hand, New York’s rate will go from $44.40 in 2024 to $464.40 in 2025, a 946 percent rise.

Costs will go up to $27.60 in 2025 even in New Jersey, where they were $0 in 2024. If prescriptions in the 42 other states that didn’t have these low rates before keep qualifying, their costs won’t go through the roof.

Marcia Mantell, founder and president of Mantell Retirement Consulting, Inc., sees the numbers and tells seniors to do their research, compare prices to current ones, but also to act. “Taking care of this much small stuff as a retiree is crazy.” All of this crazy can only be changed by Congress. Tell them to get to work.

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