If you’re on Medicare, you’ll receive one or two annual change notices within the mail or email in September about your coverage and costs for 2025. You could also be tempted to disregard what looks like garbage, because Almost a 3rd of the recipientsin accordance with an eHealth survey.
Not.
“So often, a person who is quite happy with their plan and doesn’t bother to look at their annual change notice gets a nasty surprise in January” when the plan’s recent costs and advantages take effect, says Danielle Roberts, writer of 10 Expensive Medicare Mistakes You Can’t Afford and founding partner of Boomer Benefits, which sells Medicare policies.
What is an annual change notice?
An annual notice of change out of your Medicare Part D prescription plan or a non-public insurer’s Medicare Advantage plan will determine how much your premiums, deductibles and copayments will change in the approaching yr and whether the plan will likely be offered in any respect. (Medigap plans don’t send these notices because they modify little from yr to yr.)
An annual notice of change out of your Part D plan can even let you know whether your prescriptions are covered and, if that’s the case, how much you’ll need to pay. A notice of change for Medicare Advantage will let you already know whether your doctors and hospitals will remain within the plan’s network.
While this information is all the time necessary for making smart decisions during Medicare’s eight-week open enrollment period (October 15 – December 7), experts say it’s especially necessary to read the annual change notice in 2024.
“There’s a good chance your plan will change,” says Roberts. “This year, more than ever, we can expect major changes to plans.”
Surprising effect of the $2,000 cap on prescribed drugs
This is essentially as a result of a significant change in Medicare that takes effect in 2025: the brand new $2,000 cap on the out-of-pocket cost of prescribed drugs covered by a Part D plan.
Because Part D health insurers can have to pay for higher prescription drug costs as a result of the cap, they are going to look for methods to offset this.
This could mean higher premiums (currently 43 dollars a month for stand-alone plans, on average (in accordance with KFF) deductibles and co-payments – possibly significantly higher than in 2024.
“I was very, very concerned about what impact the $2,000 cap would have on Part D premiums,” Roberts says.
The prescription drug plan change in 2025 could also cause your Part D plan to stop covering certain drugs you’re taking or increase prices for the drugs it does take.
Medicare Advantage plans – a few of that are currently combating profit losses – often include Part D coverage, so experts say they could reply to the $2,000 cap by cutting or eliminating advantages to take care of their popular $0 premiums.
As a result, your Medicare Advantage advantages that Original Medicare cannot offer — comparable to dental, vision, hearing, and gym memberships — could also be less attractive than they will likely be in 2024, or could also be eliminated entirely.
“It will be really important to understand what is changing in my current plan in the coming year and whether the plan is still a good fit,” says eHealth CEO Fran Soistman. “Does it still provide the same value as it did when I originally chose it?”
Reading and understanding the change notice
Your annual change notice will let you know – if you happen to understand it.
Only 36% of Medicare beneficiaries surveyed by eHealth said their annual change notice was “easy to understand.”
Plan to spend about half-hour fastidiously reading your Annual Change Notice to see exactly what will likely be different in 2025 and whether you ought to change plans or coverage next yr due to it.
During open enrollment, you possibly can switch out of your current Part D plan to a different, out of your Medicare Advantage plan to a different, from Medicare Advantage to Original Medicare, and from Original Medicare to a Medicare Advantage plan.
However, do not feel pressured to vary plans simply because your annual change notice says your premium goes up slightly or a profit is taking place barely.
“If there is a small reduction in benefits or a small increase in premiums, but people are happy with what the carrier is offering, they should not switch,” says Soistman.
However, he added that it’s a vital change that might cause you to modify insurers if a medicine you’re taking isn’t any longer covered by your insurance or your doctor or hospital isn’t any longer within the network.
The Medicare Plan Finder on the Medicare website (Medicare.gov) you possibly can compare Part D and Medicare Advantage plans for 2025.
And as Philip Moeller writes in his forthcoming book: Get what you deserve for Medicare: If your Medicare Advantage plan doesn’t include your selected doctor or hospital in its network in the approaching yr, it’s required by law to work with you to search out other doctors or hospitals in its network that could be an excellent fit for you.
A brand new program to avoid large premium increases
To prevent drastic premium increases for Part D, the federal government’s Centers for Medicare and Medicaid Services recently gave health insurers a bone to select with a premium stabilization plan.
Medicare will provide these insurers with a special subsidy through 2025 in exchange for not imposing exorbitant premium increases on their members.
“The premium increase of 40, 50 or more percent is likely to come down to 25 percent,” says Soistman. “It will still be a bit of a shock for some people when they see how their premiums have changed.”
Roberts says: “I’m still a little worried about the premiums, but after the announcement of the stabilization program I feel a little better.”
Help with changes to your Medicare plan
After reading your Annual Notice of Change, chances are you’ll need assistance deciding on the proper Medicare plans for 2025 and wish to know the impact of upcoming changes to your plans.
You can ask a Medicare broker or agent for help. There is a directory on the National Association of Benefits and Insurance Professionals website. The sooner you do that, the higher, as agents and brokers will likely be overloaded toward the tip of open enrollment.
“At Boomer Benefits, we won’t have to accept any new requests after Thanksgiving,” Roberts says.
If one among your prescribed drugs is not covered by your Part D plan in 2025, call your doctor to see if one other covered drug could be OK or if you happen to should discover a recent plan that covers it, Roberts advises.
For details about Part D and Medicare Advantage plans and not using a purchase suggestion, contact your State Health Insurance Assistance Program or visit the Medicare website or call Medicare’s toll-free number: 800-633-4227.
More time for open enrollment?
Soistman believes that as a result of the upcoming changes to Part D and Medicare Advantage plans for 2025, the receipt of the annual change notice will likely be delayed until the last two weeks of September.
If that is true, individuals with such plans can have less time than usual to read the notices before open enrollment.
The eHealth agency has asked the Centers for Medicare and Medicaid Services to increase the open enrollment period by about five days to offer beneficiaries, insurers and Medicare brokers more time. Boomer Benefits also supports the extension.
So far there was no response from the federal government to the eHealth proposal.
Could Medicare open enrollment in 2025 change into the equivalent of the chaotic and confusing fiasco of the Department of Education’s FAFSA financial aid form?
“I don’t think it will be quite that drastic. But I do think it will be a year of change,” says Soistman. “And change is hard for people.”
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