According to Lagradaonline, Medicare recipients should already be well on their way to deciding their policies for the upcoming year. The Medicare & You 2025 handbook has been distributed to approximately 67.4 million beneficiaries, accompanied by the annual notice of change (ANOC).
These two documents are essential for a smooth transition, with the handbook outlining new developments and the ANOC providing an overview of your current plan, including changes in benefits, coverage, costs for medical and prescription drugs, provider and pharmacy networks, service area requirements, and other administrative updates set to take effect in January 2025.
Fewer Medicare Advantage Plans
One significant change for 2025 is the reduction in the number of Medicare Advantage plans available. Jae Oh, author of Maximize Your Medicare, notes that this is largely due to rising healthcare costs and adjustments made by the Centers for Medicare and Medicaid Services. Consequently, carriers will be notifying existing enrollees of plan cancellations.
Some notable changes include:
- Wellcare will discontinue its Medicare Advantage products in six states: Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island, and Vermont.
- Humana is exiting 13 markets nationwide.
- CIGNA is rolling back its Medicare Advantage plans in eight states.
- Aetna is dropping its Medicare Advantage plans for 2025.
- CVS plans to downgrade its plan benefits and geographic presence next year.
While not every Medicare recipient is enrolled in Medicare Advantage plans, 54% of eligible beneficiaries, or around 32.8 million enrollees, are affected by these changes. As Oh summarizes, “It’s going to be a very complicated year.”
The most important action for beneficiaries is to review the ANOC and seek alternative plans in their area that will provide the necessary coverage.
$2,000 Annual Cap on Out-of-Pocket Drug Costs
Another significant update impacts those enrolled in Medicare Part D, stemming from the Inflation Reduction Act of 2022. Starting in 2025, there will be a $2,000 cap on out-of-pocket spending for prescription drugs covered under this program. This cap will be adjusted in future years to account for growth.
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Although premiums for Part D will increase to accommodate the new cap, beneficiaries will benefit from the ability to spread their medication costs throughout the year. For those on expensive medications, this translates to a $167 monthly cap on their drug expenses. However, it’s important to note that this cap only applies to medications covered by an individual’s Part D drug plan. As Melinda Caughill, co-founder of 65 Incorporated, explains, if a medication is not covered, the beneficiary will still be responsible for the full cost.
Gender-Neutral Pricing for Medigap
Another key change will impact beneficiaries of Medicare supplement insurance, commonly known as Medigap. Historically, this program has factored gender into its pricing structures. Women, who make up 58% of Medigap policyholders, have often enjoyed lower premiums compared to men.
According to data from the American Association for Medicare Supplement Insurance (AAMSI), “In 2024, for a man turning 65, the lowest monthly premium for Plan G in Phoenix was $110.14, while for a woman of the same age, the lowest premium was $99.64.”
This pricing disparity has been deemed discriminatory under the Affordable Care Act, which includes nondiscrimination rules applicable to all programs, including Medigap. As a result, women will see a rise in their premiums, making them higher than in previous years.
Stay Informed
As Medicare recipients prepare for 2025, understanding these changes is crucial for making informed decisions about healthcare coverage. Reviewing the Medicare handbook and ANOC will provide essential information to navigate the upcoming adjustments and ensure beneficiaries secure the necessary coverage for their needs.
