10/20/2024
For those with Medicare, the Annual Notice of Change (ANOC) detailing changes to your Part D prescription drug plan is typically not the most engaging material. However, this year's ANOC may be an exception, potentially outlining significant coverage adjustments for 2025.
Below are five upcoming changes to Medicare Part D for the next year that you should be aware of to make informed decisions during the open enrollment period from October 15 to December 7.
1. Your Plan May be Closing or Merging
In 2025, numerous Medicare Part D plans are either merging or ceasing, particularly affecting Aetna, AARP/UnitedHealthcare, and Mutual of Omaha plan holders. For instance, those with Aetna's SilverScript SmartSaver plan in 2024 may be shifted to the SilverScript Choice plan in 2025, potentially increasing monthly premiums by up to $35 unless they opt for a different plan.
Additionally, failing to take action during open enrollment could result in a loss of Part D coverage, as Mutual of Omaha is exiting the market.
To address this, review your Annual Notice of Change (ANOC) and look for the title "Unless You Choose Another Plan" in Section 1. If present, assess the ANOC thoroughly to determine if the new plan meets your needs or consider exploring other options during open enrollment. If Section 1 is titled "Changes to Benefits and Costs for Next Year," your plan isn't changing, but verifying your ANOC for adequate coverage is still recommended.
2. Premiums Vary Widely
The average Medicare Part D plan member will see a slight decrease in their monthly premium, from $41.63 in 2024 to $40 in 2025, as estimated by the Centers for Medicare & Medicaid Services (CMS) in September.
However, individual costs for Medicare Part D could vary significantly next year.
For instance, the monthly premium for Wellcare's Medicare Rx Value Plus plan is set to increase by an average of nearly $28 in 2025. Conversely, the Wellcare Classic plan will be approximately $17 cheaper each month in 2025 compared to 2024.
Action steps: Review the "Summary of Important Costs for 2025" and the "Changes to Benefits and Costs for Next Year" sections in your Annual Notice of Change (ANOC) to understand how your plan's premiums and other costs will shift from 2024 to 2025. Take advantage of the open enrollment period to explore if more favorable options are available.
3. Introducing a New $2,000 Out-of-Pocket Maximum
Medicare Part D has introduced a cap on out-of-pocket expenses at $2,000 for the year 2025. This means that once you have incurred $2,000 in expenses for Part D deductibles, copayments, and/or coinsurance in 2025, you will not have to pay any more out-of-pocket costs for the remainder of the year.
Furthermore, if you are among the approximately 75% of Part D enrollees with an "enhanced" Part D plan, you may spend even less. Enhanced plans may offer additional credits towards the out-of-pocket maximum. (The value of any benefits from enhanced plans that reduce your out-of-pocket expenses can be applied to the $2,000 limit.) Consequently, you may reach the cap without actually spending $2,000, as confirmed by a CMS spokesperson via email.
Action Steps: The new cap will be applied automatically, even if you remain on the same plan; no action is required on your part. Additionally, you won't have to calculate your expenses yourself; your plan's statements will track your progress towards the cap.
4. The End of the "Donut Hole"
The "donut hole" in Medicare Part D, also known as the coverage gap, will be eliminated after 2024. Until then, during the donut hole phase, beneficiaries are responsible for up to 25% of medication costs instead of their plan's standard copays and/or coinsurance.
From 2025 onwards, the Medicare Part D coverage gap will cease to exist. Beneficiaries will only need to pay their plan's deductible, copays, and/or coinsurance up to the new annual limit ($2,000 in 2025). After reaching this limit, there will be no further out-of-pocket expenses for the rest of the year.
Action steps: There's no need to do anything — the donut hole will disappear for everyone in 2025, regardless of whether you change plans or not.
5. A payment plan for prescription drugs is available.
The Medicare Prescription Payment Plan introduces an optional approach to distribute out-of-pocket costs over time, rather than requiring full payment upfront. It operates akin to a "buy now, pay later" arrangement for Medicare Part D deductibles, copayments, and coinsurance.
This plan is designed as a potential budgeting tool, not as a way to reduce costs. Your total expenses remain the same, and the plans cannot charge any fees or interest for choosing this payment option.
