The open enrollment time for Medicare has begun. People who are eligible have until December 7 to make any changes they want to their current Medicare plan so they have the coverage they need for the coming year. There are some changes that happen every year, but in 2025, there will be some big changes that recipients will need to think about to make sure they have the best plan for their needs.
The time to learn about the changes and how they will affect your goals and plan is now, while the enrollment period is still going strong. You should know about these changes because they are very important.
There’s a new cap on Part D coverage
Part D of Medicare makes sure that prescription drugs are covered. This is extra coverage that program participants can choose to buy from a private health insurance company. It is also available to everyone eligible for the program. Part D does have some limits, though. Until now, there was a “donut hole coverage model” in which companies paid for up to a certain amount, after which you had to pay for it yourself. Once you hit a certain amount, the “hardship model” kicked in and covered you again.
Thanks to the Inflation Reduction Act, this “donut hole coverage model” is no longer in place, and there is a new limit on how much you have to pay out of pocket for prescription drugs.
From now on, Part D will have three levels of coverage. The first is your expense, which is now limited to $590 per year. Before Part D starts to pay for your prescriptions, you will have to pay this deductible out of your cash. The second part is that during the first few months of coverage, you will be responsible for 25% of all drug costs until you reach a $2,000 out-of-pocket spending cap on covered drugs. After that, the insurance company will pay for all drugs that are covered.
The law says that this is the very least that must be handled. While some insurance companies may have more generous plans, this is meant to make sure that people who need expensive medicines pay less altogether.
Medicare Part D premium prices could increase
It makes sense that politicians were worried that insurance companies would raise prices to cover the new drug coverage. They knew that consumers would have to pay more, which would make the program even more complicated. That’s why the Biden administration set up a program to subsidize those plans and limited monthly rate hikes to $35 to stop the problem before it got worse for customers.
Some insurance companies have decided that this is not enough to cover the higher costs and have announced that they will be leaving some of the markets that make them the least money. Keep this in mind and look into your choices while you still have time.
There is a Medicare Prescription Payment Plan choice
The last big change is the addition of a Medicare Prescription Payment Plan. This could help people who have to pay upfront for expensive medicines by lowering their out-of-pocket costs.
This new payment plan is meant to help people better plan their budgets by spreading out the costs they expect to have for the year. They can choose to spread out their payments over 12 months if they go over the $2,000 out-of-pocket limit early in the year. This way, they won’t have to ruin their budget or risk their finances. Many seniors who are having a hard time will benefit from not taking out too many short-term loans with high interest rates or using their funds too much.
