If you have Medicare, you will likely receive one or two letters in the mail or email in September notifying you of changes to your coverage and costs for 2025. At first glance, they may look like spam and you may be tempted to ignore them. Nearly one-third of recipientsAccording to a survey by eHealth.
Please stop.
“People who are happy with their plan and don’t bother to look at the annual change letter are often in for a nasty surprise when their plan’s new costs and coverages kick in in January,” says Daniel Roberts, author of The Future of Insurance. 10 Costly Medicare Mistakes You Should Never Make He is a founding partner of Boomer Benefits, which sells Medicare insurance.
What is the Annual Change Notification??
The annual change notice from your Medicare Part D prescription drug plan or private insurer’s Medicare Advantage plan will tell you the difference in your premiums, deductibles, and co-payments for the coming year and whether you will be offered a plan (Medigap plans do not change much from year to year, so you do not receive this notice).
The annual change notice from your Part D plan will tell you whether your prescription drugs will be covered and, if so, how much you’ll pay. The Medicare Advantage change notice will tell you whether doctors and hospitals will remain in your plan’s network.
While this information is always essential to making smart choices during Medicare’s eight-week open enrollment period (October 15-December 7), reading the annual change notice is especially important in 2024, experts say.
“There’s a good chance something will change in your plans,” Roberts says, “and we expect there will be more changes to plans this year than ever before.”
The surprising effects of a $2,000 prescription drug cap
This is largely due to major changes to Medicare coming in 2025, including a new $2,000 cap on out-of-pocket costs for prescription drugs covered by Part D plans.
Part D health insurers will likely be looking for ways to compensate people for the increased costs of prescription drugs that the caps will bring.
That could mean higher insurance premiums (currently $43/month According to KFF, stand-alone plans will see average health care costs (deductible amounts and out-of-pocket expenses) increase and could be significantly higher than they were in 2024.
“I was very concerned about how the $2,000 cap would affect my Part D premiums,” Roberts said.
Changes to prescription drugs in 2025 may mean that your Part D plan no longer covers certain drugs you take, or the prices of drugs that are covered may increase.
Medicare Advantage plans, some of which are currently facing profit pressures, often include Part D coverage, so experts predict they may combat the $2,000 cap by cutting or eliminating benefits to preserve the popular $0 premium.
As a result, Medicare Advantage benefits that Original Medicare doesn’t offer, such as dental, vision, hearing and gym memberships, may be less attractive than they are in 2024 or may disappear altogether.
“It’s really important to understand what’s going to change in your current plan next year and whether that plan is still a good fit,” says Fran Soistman, CEO of eHealth. “Does it still provide the same value as when you first chose to enroll in that plan?”
How to read and understand change notices
The annual change notice will state this (if you can understand it).
Only 36% of Medicare beneficiaries surveyed by eHealth said their annual change letters were “easy to understand.”
Expect to spend about 30 minutes carefully reading your annual change notice to figure out exactly what’s changing in 2025 and whether you’ll need to make any changes to your plan or coverage next year as a result.
During the open enrollment period, you can switch from your current Part D plan to another plan, from a Medicare Advantage plan to another plan, from Medicare Advantage to Original Medicare, or from Original Medicare to a Medicare Advantage plan.
But don’t feel pressured to switch plans just because your annual change notice says your premiums will go up a little or your benefits will be cut a little.
“If you’re happy with what your insurer is providing you, even if it means a small reduction in benefits or a rise in premiums, you shouldn’t change,” Soistman says.
But if a medication you take is no longer covered or your doctor or hospital is no longer in network, those changes could be significant enough to prompt you to switch insurance, he added.
Medicare Plan Finder on the Medicare website (Medicare.gov) allows you to compare Part D and Medicare Advantage plans for 2025.
And Philip Moeller writes in the upcoming revised edition of his book: Get yours with MedicareIf your Medicare Advantage plan doesn’t have your favorite doctor or hospital in its network in the coming year, the plan has a legal obligation to work with you to identify other preferred doctors or hospitals in its network.
New program to help avoid big premium hikes
To prevent large increases in Part D premiums, the government’s Centers for Medicare and Medicaid Services recently granted health insurers a premium stabilization plan.
Medicare will provide special subsidies to these insurers through 2025 in exchange for not imposing exorbitant premium increases on members.
“Premium increases of 40, 50 or even more will probably come down to 25 percent,” Soistman said. “Some people will still be a little surprised when they see how their premiums have changed.”
“I’m still a little concerned about insurance premiums, but I feel a little more at ease now that the stabilization program has been announced,” Roberts said.
Help if your Medicare plan changes
After reading your annual change notice, you may want to get help deciding which Medicare plan is right for you in 2025 and understand how the upcoming plan changes will affect you.
You can ask your Medicare broker or agent for assistance. directory Check the National Association of Employee Benefits Insurance Professionals website. The earlier, the better, as agents and brokers will be busy as the enrollment period closes.
“Boomer Benefits will not be accepting any new requests after Thanksgiving,” Roberts said.
If one of your prescription drugs will no longer be covered by your Part D plan in 2025, Roberts advises contacting your doctor to see if a different covered drug will work, or if you should look for a new plan that includes it.
For information about Part D and Medicare Advantage plans without purchase recommendations, State Health Insurance Assistance Programs Or, visit Medicare’s site or call Medicare toll-free at 800-633-4227.
Will open enrollment take longer?
Soistman believes that with all the changes coming to Part D and Medicare Advantage plans in 2025, the arrival of the annual change notification paperwork will be delayed until the last two weeks of September.
If so, plan participants would have less time than usual to read the notice before their enrollment begins.
The eHealth organization has asked the Centers for Medicare & Medicaid Services to extend the open enrollment period by about five days to give beneficiaries, insurers and Medicare brokers more breathing room, and Boomer Benefits also supports the extension.
So far, the government has not responded to the eHealth proposal.
Could open enrollment in 2025 be the Medicare equivalent of the confusion, chaos and mayhem caused by the Department of Education’s FAFSA financial aid form debacle?
“I don’t think it’s going to be that dramatic, but I do think this is going to be a year of change,” Soistman said, “and change is hard for people.”
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