We may only be halfway through the year, but plans for big changes in Medicare for 2025 have already been announced by the Centers for Medicare and Medicaid Services (CMS). If you are a current Medicare recipient or will be soon, you’ll want to know about them.
First, CMS is cracking down on insurance carriers’ ability to offer brokers special incentives to enroll people in their plans. Brokers can no longer get special bonuses for enrollments; if they do, they can no longer charge administrative fees. Given that, straight commissions will be going up for Advantage and PDP plans, so it should make no difference to the broker which company’s plan an enrollee chooses as far as their own compensation is concerned. This measure adds an important consumer protection for seniors, and we applaud the efforts.
Second, and more consequentially, Part D Prescription Drug Plans (PDPs) will be adapting to some big changes next year. For over 51 million Medicare beneficiaries who utilize drug coverage, Part D drug benefits are delivered one of two ways: Medicare Advantage plans, which cover physician fees and other services as well as prescription costs, or stand-alone PDP plans for people who choose to stick with original Medicare. Insurers contract to negotiate drug prices and pharmacy costs for these plans, and seniors are left to pay whatever they decide. The Inflation Reduction Act, passed earlier this year, aims to address this consumer burden by capping out-of-pocket expenses at $2000, limiting the cost for insulin to $35 a month for Medicare patients, and it allows the Medicare program to bargain drug prices with manufacturers. CMS estimates the new rule will save beneficiaries $26.5 billion between 2024-2032. Well, thank goodness. Sounds great, right?
On the surface, it looks like good news for many seniors – especially those who rely on expensive, brand-name medications for chronic and other conditions. However, this new rule will not apply to out-of-pocket costs for Medicare Part B drugs which includes things like vaccines and other doctor-administered injections, and drugs administered intravenously. The $2,000 cap will be indexed to the growth in per capita Part D costs, and it may rise each year after 2025.
But what’s good for consumers is bad for profits, and much speculation is tossed around regarding how drug companies, insurance companies, and pharmacies will compensate for new costs and diminished profits. Will we see plans restricting which medications they cover, more prior authorization requirements to obtain a prescription, and additional hikes to Part D premiums and co-pays? Likely, we will. And likely there will be considerable pushback from legislators to hold plans accountable if they choose to cut back on the prescriptions they cover. Some experts believe some insurance companies may choose to stop offering PDP plans entirely.
We will be here for it however it lands. So when you’re ready, let us help you carefully review your Medicare options and find the plan(s) best suited for you. Give us a call! We are local, our services are free, and we are always happy to help.
Reach me at (850) 687-7606 or christian@evergreenhealthins.com.
Author: Sowal Editor
Views: 0
