How Medicare will change starting in 2025 – Lists all confirmed changes

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Medicare’s annual open enrollment period, which runs from mid-October to December 7, is an opportunity for beneficiaries to change their current plans. During this period, individuals can switch between Original Medicare and Medicare Advantage, change Medicare Advantage plans, adjust prescription drug plans, or even drop their drug coverage altogether. These choices allow beneficiaries to tailor their health care coverage to better align with their current needs.

One of the most notable updates is the removal of the “doughnut hole” in Part D. Previously, this gap in coverage meant that after spending a certain amount on prescription drugs (around $5,030), beneficiaries would have to cover all drug costs out of pocket until they reached a higher threshold of $8,000, at which point “catastrophic coverage” kicked in.

The gap was especially burdensome for those with high prescription drug costs, leaving them vulnerable to significant out-of-pocket expenses. However, starting in 2024, Medicare Advantage plans, which supplement primary coverage, will introduce a $2,000 cap on out-of-pocket expenses for prescription drugs. This cap includes deductibles, copayments, and coinsurance but excludes monthly premiums.

It’s important for recipients to be aware that while this $2,000 limit is beneficial, premiums may increase as a result of this change. Some Medicare Advantage providers may adjust their premiums to offset the cost of implementing the cap, so it’s wise for beneficiaries to consider whether the savings from the new cap outweigh any potential increases in premium costs.

Dr. Meena Seshamani, director of the Federal Center for Medicare, expressed the significance of these changes in an interview with AARP, saying, “It’s the first time in the history of the Medicare program that people have a cap on how much they could have to pay out of pocket.” The new cap on out-of-pocket expenses for prescription drugs marks a transformative step in Medicare’s ongoing efforts to support its beneficiaries.

As Medicare open enrollment begins, it’s essential for seniors to familiarize themselves with these updates. “Such a significant change means that in open enrollment, it is so important to shop,” Seshamani explained. “Because with such big changes, there very well could be a plan that better suits your health and financial needs.”

Other changes to Medicare Plans

Additionally, in 2024, Medicare Advantage plans could see another expansion in the range of prescription drugs covered. This change is linked to a March 2023 decision by the FDA to approve the drug Wegovy for individuals with cardiovascular disease. As a result, Medicare Advantage plans may start covering this medication, which is primarily designed for weight management. While drugs like Ozempic and Mounjaro, used for Type 2 diabetes, are already covered under Part D plans, Wegovy’s approval opens the door for more comprehensive treatment options for people with specific health conditions. Another drug, Zepbound, might also be added to coverage lists if the FDA approves its use for conditions like sleep apnea, further expanding treatment options.

Keeping track of these changes can be difficult, and beneficiaries might find it challenging to stay informed about their benefits throughout the year. To address this, Medicare Advantage plans will now provide midyear statements to beneficiaries, detailing their benefits and usage. These statements will outline what services, such as dental, vision, or fitness benefits, beneficiaries have not yet used. This initiative is designed to help seniors take full advantage of their plans, encouraging them to use valuable health services they might have overlooked.

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Finally, the program’s website, Medicare.gov, serves as a comprehensive resource for individuals looking to compare plans. It allows users to review coverage options, costs, and quality ratings of various plans. The open enrollment period is the ideal time to make any necessary adjustments to one’s coverage, and with the changes to prescription drug coverage and other aspects of the plans, it’s more important than ever to review and compare plans.

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