Medicare’s Annual Enrollment Period is just around the corner. The flood gates open on October 15 and for the seven weeks following that Adams Insurance (and all agents in the Medicare world) will be Busy with a capital “B”. The government will make new plan information available beginning October 1st, but no applications will be accepted until October 15th.
Agents are only now getting a first glance at the offerings for 2025, but we are sworn to secrecy under penalty of imprisonment. I hope you know I am joking about the imprisonment part, but not about the being sworn to secrecy part. The reason we can’t spill the beans is because most of these companies are still waiting for final approval from CMS (Center for Medicare and Medicaid Services).
What are the Main Concerns?
Good Question! Prescription drug plans will be altered dramatically. There is good news and bad news which will have the insurance world falling all over itself. The government loves to stir the pot. Let’s start with the good news.
This past Friday there was a lady in my office who was wrestling with multiple chronic health problems. Let’s call her Jane Doe. Jane had a long list of medications, several of which are really expensive. For those of us with drugs that might cost a few hundred dollars a month, Jane could easily say “Oh, suck it up and stop your wining.” Honestly, I’ve had to do a check on my feelings and say, “Thank you Lord that my situation is not as major as Jane’s.”
The Good News
For Jane and all Medicare beneficiaries with prescription drug coverage, there will be a cap of $2000 on drug costs for the year. Meaning no person in a stand-alone Prescription Drug Plan or Medicare Advantage Plan with prescription drug coverage will spend more than $2000 on drug costs in 2025. Compared to the retail cost of Jane’s drugs, this is a drop in the bucket. In her case the Inflation Reduction Act is truly helping.
The Bad News
I heard a statistic recently that tells us this drug cap will help less than 5% of Medicare beneficiaries. However, the cost of maintaining this benefit for that 5% will be carried by the remaining 95%. The projected cost increase per person per month is $38. To make up for this difference insurance companies have a limited number of options.
Potential Adjustments
Logically, the first option is to increase premiums. For those folks on a Medicare Supplement and a prescription drug plan (PDP), increasing the premium of their PDP seems to be the most logical path. Some PDP premiums could triple or more. Which is why we are anticipating seeing a significant number of people moving to Medicare Advantage plans.
A second option is to adjust the formularies. For example, a drug that used to be a tier 2 drug might be a tier 3 drug in 2025. What I used to pay $5 or $10 for, might now cost $45. I personally have a couple of drugs that might be affected in this way.
On the Medicare Advantage side of the market, I have no doubt we will see minor adjustments. For example, an inpatient hospital stay that costs $300 a day this year might be $350 next year. Or an Xray that costs $5 this year might be $15 next year. Again, we won’t know until CMS approves the plans currently in for review.
What Should You Do?
Late in September you will get information from your insurance provider called the Annual Notice of Change. The government mandates that these are sent out no later than September 30. YOU WILL GET THIS and when you do READ IT!!!! If you aren’t comfortable with the changes, CALL US.
WARNING! WARNING! WARNING!
The vultures will be after you. There will be an excessive amount of TV Ads, mail, phone calls, emails and internet ads. DO NOT RESPOND TO THEM. They are there to sell you. We are here to serve you! Save yourself the headache, Just give us a call.
Call Katie at 317-606-5426 for an appointment.