Navigating Medicare Plan Changes for 2025

• Prescription drug benefits. The biggest change for 2025 Medicare Advantage plans is for prescription drug benefits provided through Medicare Part D. The number of prescription drug plans offered through Medicare Part D is decreasing from 30 plans to 21 plans, the lowest number of Medicare Part D plans since the state of Medicare Part D in 2007. Many of the Part D plans that are remaining are raising their deductibles and making other changes that can increase out-of-pocket costs. A Part D drug plan deductible is the amount the Part D plan beneficiary pays before coverage of a particular medication kicks in. On the other hand, one positive change taking effect January 1, 2025, is that Part D beneficiaries’ out-of-pocket costs for Part D medications will top out at $2,000. In addition, a Part D beneficiary will have an option to pay off his or her total drug bill in monthly installments over the course of the year.  Any Medicare Part D beneficiary must be enrolled in Original Medicare. Part D beneficiaries are advised to go to www.medicare.gov to find out whether their prescriptions are included in a Medicare Part D prescription drug plan and how much the drug plan costs. For more information, the beneficiary should go to the drug plan’s web site and look for a formulary – the list of covered prescription drugs and their costs.

• Hospital networks. More hospital systems are leaving Medicare Advantage plan networks. A survey of hospital CFOs found more than half were considering or planning to leave a Medicare Advantage network. Those federal annuitants enrolled in Original Medicare (Medicare Part A and Medicare Part B) who care about having complete access to their doctors and local hospitals should look at their Medicare Advantage plan’s network directory and make sure their doctors and local hospitals are in the directory.  If a federal annuitant enrolled in Original Medicare wants unrestricted access to their medical providers, the federal annuitant is then advised to remain in Original Medicare and be enrolled in an FEHB program health plan, a Medicare Supplement plan, rather than a privately run Medicare Advantage plan. This is because nearly all hospitals and doctors participate in Medicare and accept “assignment” from Medicare. Using an FEHB program health plan as a Medicare supplement plan has the advantage that FEHB program plans are capped. FEHB plan enrollees benefit from the maximum out-of-pocket expenses they have to pay each year. The same cannot be said about privately sold Medigap and Medicare supplement plans. Those plans that do cap annual out-of-pocket expenses can be pricey, or even impossible to obtain. For that reason, federal annuitants are strongly advised not to drop their FEHB program enrollment in favor of a private Medigap or Medicare Supplement policy, typically sold by insurance companies and agents. Note that upon dropping his or her FEHB program enrollment, a federal annuitant cannot reenroll in the FEHB program. 

• Additional Medicare Advantages plan features. Most individuals – employees and retirees – have seen or heard about the most appealing features of Medicare Advantage plans. These features include the extra benefits the plans promise – everything from dental and vision coverage to fitness classes. These extra benefits are also getting trimmed in some Medicare Advantage plans. It is important for a potential enrollee in a Medicare Advantage plan to check the plan’s full description known as “evidence of coverage” documents for details.

In particular, when examining the plan’s “evidence of coverage” document, a potential enrollee in the plan should be aware of the terms “limits apply” or “prior authorization necessary.” 

Picking a Medicare Advantage plan undoubtedly is not an easy task. It is therefore important for federal annuitants who are considering enrolling in a private Medicare Advantage to get unbiased advice. It is unfortunate that insurance companies and their agents who sell Medicare Advantage plans, and are often paid commissions, can have financial motivations for steering individuals toward certain products.

To find impartial information about private Medicare Advantage plans individuals are advised to start with Medicare’s own Web site, https://www.medicare.gov. The State Health Insurance Assistance Program (SHIP) has counselors in every state and the District of Columbia. The nonprofit Medicare Rights center maintains a national helpline. The Kaiser Family Foundation (KFF) and the Center for Medicare Advocacy both offer helpful information about purchasing a Medicare Advantage Plan and a Medicare Part D prescription drug plan.