Changes to ponder during Medicare open enrollment

Medicare’s open enrollment, which ends Dec. 7, is in full swing, leaving beneficiaries to ponder which plan they want for 2025. Changes are coming that might influence the decision.

CNN this week warned Medicare Advantage plan enrollees that some plans they’re in could pack surprises, so people should carefully review changes as they decide what to do with open enrollment. “Although the swiftly growing market remains stable overall, insurers are making a flurry of changes that could leave some senior citizens hunting for new policies, paying more out of pocket or getting skimpier supplemental benefits.”

“In recent years, this is the most benefit disruption we’ve seen in the market,” Lindsay Knable, a partner in consulting firm Oliver Wyman’s health and life sciences practice, told CNN.

Medicare is a government-run insurance program for older Americans and people with certain disabilities or medical conditions. The Social Security Administration oversees it and monthly premiums are deducted from Social Security payments.

Traditional Medicare includes Part A (hospital care), Part B (physician and many other services) and Part D (drug coverage). People don’t have to take all three, but late enrollment carries a penalty unless you fit into very limited exceptions. Part C is Medicare Advantage, plans provided by private companies. Those plans are approved by Medicare and must provide certain services, but they can also tailor offerings for other things, such as a better drug formulary or access to hearing or vision care not covered by traditional Medicare.

A little over half of Medicare enrollees are in a Medicare Advantage plan. But Oliver Wyman said about 8% of the Advantage plans offered in 2024 are going away, which will affect close to 2 million Advantage plan enrollees. Of those, anyone who doesn’t choose a new plan will be auto-enrolled in traditional Medicare.

Folks also need to look at whether their deductible is changing. CNN reported that more than 16 million enrollees in Part D didn’t have a deductible, but close to half of them will have some kind of deductible in 2025 if they don’t change plans. And some Advantage plans will be less generous with features like dental, hearing and vision coverage.

Changes coming in 2025

Traditional Medicare has some changes, too. Details are available in the Medicare & You 2025 handbook. Among them:

• Out-of-pocket drug costs will be capped at $2,000 a year for those with Part D coverage as a result of the Biden administration’s new prescription drug law. And starting in January, people can spread drug costs across monthly payments if they’d like. It won’t lower the costs, but might make the expense easier to manage.
• Mental health and well-being coverage is expanding . Covered mental health includes some services by marriage and family therapists, mental health counselors, a structured day program and an intensive outpatient program. The latter two are covered for more hours a day than that provided in a doctor’s or therapist’s office.
• Caregiver support is improving, including training for tasks like giving medicine and personal care. Some respite will be covered for those caring for relatives in hospice — up to five days. And a new pilot program will benefit some people who have dementia and their caregivers.
• Remote telehealth visits for medical care will no longer be available from home , though some telehealth services for mental and behavioral health will. You’ll need to be in an office or medical facility in a rural area for most telehealth. There are exceptions, including monthly end-stage kidney disease telehealth appointments, evaluation and treatment for an acute stroke, diabetes self-management training and medical nutrition therapy.
• Postal service employees, retirees and their families have a new coverage provider for benefits. They will be leaving the Federal Employee Health Benefits Program and moving to the Postal Service Health Benefits Program.

Medicare coverage generally requires a premium, copayment and deductible. And late enrollment invites a lifelong penalty that can add up, so those who will want Medicare need to pay attention to the rules and the enrollment periods. For most people, that first enrollment period is three months before the month you turn 65 to three months after. After that, open enrollment is always Oct. 15 to Dec. 7.