Important changes in the cost of Medicare for Americans – They will be official starting from this date

The open enrollment period for Medicare is under way and those eligible to receive the service will have to decide soon if they will continue the present service they receive or if they will choose to change the way their medical coverage works. This will, of course, impact the price of the service they receive, as there have been some changes to the working of the program.

How does Medicare work

Most people over 65 are eligible to participate in Medicare and they have to basic but comprehensive options for care, better known as Part A, which covers hospital insurance and Part B, which covers preventive and outpatient health care costs.

As a general rule, Part A is covered by the program without extra premiums as long as the eligible person paid Medicare taxes while working, however hospital stays can bring deductibles associated. Part B does have monthly premiums that beneficiaries have to pay to use the service. For 2024, the standard monthly premium is $174.70 and can be higher depending on the recipient’s income. There is also a $240 annual deductible that needs to be paid, bringing the rough total of what beneficiaries pay for the service to 20% of the real cost that they would have to pay out of pocket.

There are two other parts to the service. Part C, better known as Medicare Advantage which is provided by private health insurance companies but heavily regulated by the Social Security Administration and which can vary in cost depending on the coverage purchased, the state and the insurance company that provides it. Part C is not always compatible with Medicare Part A and B, Medicaid or employer sponsored insurance, so always be vigilant when purchasing this insurance.

Part D is the last official segment of Medicare, and it covers the cost of prescription medications. This is the one part of the program which we know will raise significantly in 2025. With the new cap on prescription medication payments that has been set, where only up to $2,000 will have to be paid out of pocket, insurance companies will raise their rates to ensure that this new cap does not affect their bottom line.

The Rise in prices of Part D premiums

Eight states in particular, Alaska, California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island and Vermont will see sharp increases in their payments, as historically they have been paying quite low premiums for prescription drugs, often as low as $0.50 per month, or $6 annually in 2024.

Historically, those enrolled in the Wellcare Value Script plan, provided by Centene (CNC) have had the lowest rates as this plan primarily covers generic medications. In 2025 it will experience premium increases of over 500% in several of these states that its customers will have to pay if they want to continue to be covered under the same conditions.

Looking at the real numbers that have been announced for two blood pressure medications, in Alaska, where the 2024 annual premium was $42, the 2025 cost will jump to $267.60, representing a 537% increase. California will experience the most dramatic rise, with the premium increasing from $4.80 in 2024 to $208.80 in 2025, an unprecedented 4,250% hike. Connecticut, Massachusetts, Rhode Island, and Vermont will each see their premiums rise from $6 annually in 2024 to $148.80 in 2025, marking a 2,380% increase. Meanwhile, New York’s premium will increase by 946%, from $44.40 in 2024 to $464.40 in 2025. Even in New Jersey, where the 2024 premium was $0, the 2025 cost will rise to $27.60. The 42 other states that did not have these low premiums before will not see their costs skyrocket as long as their prescriptions continue to qualify.

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Seeing the numbers, Marcia Mantell, founder and president of Mantell Retirement Consulting, Inc advises seniors to do their homework and compare prices to current ones, but to take action “Dealing in this much minutiae as a retiree is beyond crazy. Only Congress can change any of this insanity. Encourage them to get on it.”

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