Medicare Enrollment 2025: Key Changes and Mistakes to Avoid This Open Period

According to Lagradaonline, As Medicare recipients prepare for the upcoming year, it’s crucial to review the Medicare & You 2025 handbook, which has been distributed to the approximately 67.4 million beneficiaries enrolled in the program. This handbook, along with the annual notice of change (ANOC), serves as essential resources for understanding upcoming modifications to Medicare plans.

Understanding the Handbook and ANOC

The Medicare & You 2025 handbook outlines new developments in the program, while the ANOC provides an overview of your current plan. This includes important changes in benefits, coverage, medical and prescription drug costs, provider and pharmacy networks, service area requirements, and other administrative updates set to take effect in January 2025.

Fewer Medicare Advantage Plans Available

One of the most significant changes for 2025 is the reduction in the number of Medicare Advantage plans. Jae Oh, author of “Maximize Your Medicare,” notes that this decline is largely due to rising healthcare costs and recent changes implemented by the Centers for Medicare and Medicaid Services (CMS). As a result, carriers will notify current enrollees about the cancellation of certain plans.

Some notable changes include:

• Wellcare will discontinue Medicare Advantage products in six states: Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island, and Vermont.
• Humana is exiting 13 markets nationwide.
• CIGNA is reducing its Medicare Advantage plans in eight states.
• Aetna will drop its Medicare Advantage plans for 2025.
• CVS plans to downgrade its benefits and geographic presence next year.

Although not all Medicare recipients were enrolled in Medicare Advantage plans in 2024, 54% of eligible beneficiaries (approximately 32.8 million enrollees) will be affected by these changes. As Jae Oh emphasizes, “It’s going to be a very complicated year.” Therefore, it is vital for beneficiaries to thoroughly review their ANOC and seek alternative plans that meet their coverage needs.

$2,000 Annual Cap on Out-of-Pocket Drug Costs

A significant change impacting those enrolled in Medicare Part D is the introduction of a $2,000 cap on out-of-pocket spending for prescription drugs. This change, part of the Inflation Reduction Act of 2022, means that beneficiaries will have their annual drug costs limited. While Part D premiums may increase to accommodate this cap, it allows beneficiaries to spread out medication costs throughout the year, capping monthly expenses at $167 for those on expensive medications.

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It’s important to note that this cap applies only to medications covered by a beneficiary’s Part D drug plan. As Melinda Caughill, co-founder of 65 Incorporated, explains, if a medication is not covered, the full cost will still be the beneficiary’s responsibility.

Gender-Neutral Pricing for Medigap Plans

Medicare supplement insurance, also known as Medigap, will see a shift toward gender-neutral pricing. Historically, premiums for Medigap plans have varied based on gender, with women, who make up 58% of policyholders, often paying lower premiums than men.

Data from the American Association for Medicare Supplement Insurance (AAMSI) reveals that in 2024, a 65-year-old man in Phoenix could expect the lowest monthly premium for Plan G to be $110.14, while a woman of the same age could pay as little as $99.64 for the same plan. 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 of this change, women’s premiums are expected to rise, meaning they may pay more than they have in the past.

Stay Informed and Prepared

With these critical updates, it’s essential for Medicare recipients to stay informed about changes to their coverage and benefits. Reviewing the Medicare & You handbook and the ANOC will help beneficiaries make educated decisions for their healthcare needs in 2025.