In 2025, Medicare will undergo its most significant changes since its creation in 2006.
These changes are primarily a result of the Inflation Control Act and include setting drug copays at $2,000, adding opt-in payment plans, and other broad changes to Medicare Advantage plans.
Investopedia spoke with Jennifer Teague, director of health insurance and benefits at the National Council on Aging, about how Medicare beneficiaries should prepare for changes to their health insurance plans. The interview has been edited for brevity and clarity.
Investopedia: What should Medicare beneficiaries be aware of before enrolling in Medicare next year?
Jennifer Teague: Every year, through open enrollment, we encourage and remind Medicare beneficiaries to review their drug plans and Medicare Advantage plans.
Every year, prescriptions can change, including what drugs are covered and which doctors are part of the network. The open enrollment period, which runs from October 15 to December 7, is the only period during which many Medicare beneficiaries must make changes to their coverage for the following year.
Investopedia: What are the most important changes to Medicare that beneficiaries should know about?
Jennifer Teague: One of the biggest changes that people are starting to talk about is the $2,000 out-of-pocket cap for Medicare beneficiaries who get their prescriptions through a Medicare drug plan. The donut hole will no longer be effective starting January 1, meaning Medicare beneficiaries will only have to pay up to $2,000 out-of-pocket for prescription drugs covered by their enrolled prescription plan.
There’s also something called the Medicare Prescription Payment Plan, which gives Medicare beneficiaries the opportunity to spread the cost of $2,000 a year if they choose. Although all Medicare beneficiaries are offered the opportunity to enroll in that benefit and it is tailored to all drug plans, not all beneficiaries are required to enroll in that benefit.
Investopedia: What challenges do you think will arise from the many changes coming next year? What can people do to prepare for Medicare enrollment on October 15th?
Jennifer Teague: I think there can be some confusion about the $2,000 out-of-pocket maximum and whether you can spread it out over the year. This is a new option that individuals have not historically had, and it can be confusing.
The first thing I would encourage people to do is make a list of the medications they are taking, their names, milligrams, and frequency. Next, schedule an appointment with a State Health Insurance Assistance Program (SHIP) counselor to review your plan options and decide what’s best for you for the upcoming year.
Individuals are always encouraged to check whether they are eligible for additional medical benefits through the Medicare Savings Program. This helps reduce prescription drug costs and Medicare premiums.
