INSURANCE MATTERS
Medicare Upheaval:
What’s Happening with Part D?
By Michael Pane
Next year could get complicated for folks with a Medicare Advantage or a Stand Alone Part D Prescription Drug Plan.
While it’s always good to pay attention to your Annual Notice of Changes (ANOC) that arrives in your mailbox in September, give it an extra look this year. With the changes coming in 2025, this is the year to talk to a Medicare insurance agent to guide you through the details if you haven’t used one before.
New & Possibly Better
So, what’s the deal and why should you be concerned? In 2022, the Inflation Reduction Act (IRA), tackled Medicare Part D and prescription drug affordability. Drug costs will have a lower cap in 2025 for Medicare beneficiaries enrolled in Medicare Advantage or Stand Alone Part D Prescription Drug plans. The cap drops from $8,000 in 2024 to $2,000 next year. That’s great news for people with high-cost prescriptions. After meeting your $2,000 out-of-pocket costs for the year, you’ll pay nothing.
Also new for 2025 will be the option for older adults to go on a payment plan with their carrier to purchase their medications. If you spend more than $600 monthly on prescriptions, you can cap your monthly expenses by spreading the cost throughout the year.
One more change that will make a big difference to a small percentage of people has to do with a deadline. Companies that employ Medicare-eligible employees and cover them and their dependents on their plans must notify them in writing by mail before Oct. 15 if the company’s medical coverage falls short of Medicare’s basic coverage. The letter is called a Notice of Creditable Coverage (NOCC).
Most company insurance plans meet the standard. But for the few that don’t, Medicare-eligible employees were left scrambling for coverage because they often didn’t receive timely notice. That meant that some missed crucial Medicare enrollment windows. The new notification requirement extends to employees and dependents covered through a company’s COBRA plan, and disabled, working employees.
Looking to 2026, the federal government is negotiating with drug companies to control the cost of medicines commonly used by older adults such as Jardiance, Ozempic, Trelegy and Humira. If the cost goes down, as expected, Medicare insurance providers may no longer cover some of the drugs to keep their operating expenses in check. In short, what’s covered by Medicare prescription plans is likely to change.
While you may be comfortable now with your Medicare coverage and supplemental coverage, providers and prescriptions fluctuate within plans. Everyone should review their coverage annually with a licensed Medicare insurance provider. Don’t get caught by surprise.
Michael Pane is a Certified American Medicare Disabilities Advocate Agent and owner of the Pane Agency. He can be reached at 716-526-8450 or [email protected].
