Older Americans need to act fast if they want to review and possibly adjust their Medicare benefits for the upcoming year. The annual open enrollment period is coming to a close on December 7, giving Medicare’s 67.8 million enrollees just a little more time to ensure their health and prescription drug plans still meet their needs.
Juliette Cubanski, the deputy director specializing in Medicare policy at KFF, emphasizes the importance of this period. Despite many feeling content with their current plans and hesitant to switch, she suggests reassessing the available options. “Now is as good a time as any,” Cubanski states, noting that reviewing plans could potentially reveal savings opportunities or improved coverage options, particularly for costly medications.
Switching gears to personal finance, noteworthy trends include Americans ranking financial success as a prime concern, millennials gearing up for substantial holiday spending, and significant 401(k) changes anticipated in 2025.
For those starting this Medicare journey, Philip Moeller, author of Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs, recommends beginning with Medicare.gov. This website features an online tool that outlines plans available by location, detailing premiums and costs. Furthermore, state-based counselors from the State Health Insurance Assistance Program (SHIP) are ready to offer free guidance.
Analyzing your options thoughtfully includes several key considerations. First, access to your preferred healthcare providers is crucial.
Beneficiaries can stick with original Medicare, which entails Parts A and B, with optional Part D for drugs, or opt into private Medicare Advantage plans. Original Medicare allows visits to any doctor nationwide who accepts it, but Medicare Advantage plans restrict access to certain networks, limiting your choice of doctors and hospitals.
“It’s best to check—don’t just assume—whether your doctors are still within your plan’s coverage,” Moeller advises. He suggests confirming coverage directly with Medicare Advantage plans or healthcare providers, as plan brochures might not reflect the latest information.
When considering prescription drugs, it’s important to verify their coverage under your chosen plan. From 2025, Medicare Part D will implement a $2,000 annual cap for out-of-pocket prescription costs, as mandated by the Inflation Reduction Act of 2022.
This change means insurers will shoulder higher costs for the approximately 8% of users who need costly prescriptions. However, this could lead to adjustments like increased co-pays or less generous benefits for everyone else as companies look to offset costs. Moeller underscores the importance of understanding the specifics of Part D plans, advising beneficiaries to thoroughly evaluate whether these plans still meet their needs.
Expect increases in deductibles for drug coverage under Medicare Advantage plans next year; from around $50 per month to just over $200, says Cubanski. It’s essential to anticipate and manage your overall out-of-pocket spending—including premiums, deductibles, and coinsurance—as we approach 2025.
Notably, Medicare Part A generally requires no premium, but changes are coming for Part B. In 2025, the standard monthly premium will increase to $185, up from this year’s $174.70, and annual deductibles will rise to $257, compared to the $240 rate in 2024.
Medicare Part B traditionally covers only 80% of expenses for doctors and outpatient care, leaving a considerable financial burden on beneficiaries. To mitigate these costs, many opt for Medigap plans. These supplements, averaging $217 monthly according to KFF, help cover expenses not included under basic Medicare, though rates differ by state.
Conversely, costs in Medicare Advantage plans vary widely. Beneficiaries could face higher payments for out-of-network visits. According to KFF, the average out-of-pocket limit is $4,882 for in-network services and $8,707 if you include out-of-network services. Moeller emphasizes, “Details matter,” stressing the importance of understanding these nuances.
Deciding between original Medicare and Medicare Advantage ultimately boils down to personal preference. While critics voice concerns over restricted access and unexpected costs with Medicare Advantage, some find it a better fit. It’s usually more affordable than traditional Medicare with a Medigap policy and offers additional coverage options like hearing, vision, and dental services. However, things like prior authorization requirements in Medicare Advantage, which aren’t generally a factor in original Medicare, should also be considered.
If need be, there remains an opportunity to make changes even after the December 7 deadline. Moeller points out, “Dec. 7 is important, but it’s not the end-all date if adjustments are needed.” A special Medicare Advantage enrollment period begins January 1 and runs through March, allowing for plan changes or transitions to original Medicare. Additionally, life-changing events such as relocations might qualify beneficiaries for special enrollment periods, and those affected by natural disasters in 2024 might receive extensions for their 2025 coverage sign-ups.
