This fall, the annual Medicare open enrollment season could look considerably different than in previous years. That’s because of the Inflation Reduction Act’s (IRA) new, $2,000 cap on out of pocket costs associated with prescription drugs covered by Medicare Part D. While the out of pocket cap reduction (down from $3,300 in 2024) sounds good on the surface, speculation is that Medicare Part D health insurers will look for ways to offset the benefit upgrade. Here’s what to look for in the coming weeks –
Importantly, current Medicare beneficiaries should thoroughly review their annual “Annual Notice of Change”, which should hit mailboxes during the last half of September. This notice includes pertinent changes to Medicare coverage such as premiums, deductibles, copays, participating providers and covered drugs. Experts say to expect to spend about 30 minutes reviewing the notice to see what might be changing in 2025. (Note: According to a survey by eHealth, only 36% of Medicare beneficiaries deem the notice as “readily understandable”). Medicare insureds could see steep increases to premiums, plan related out of pocket costs, and a reduction in the number of covered drugs, to name a few possibilities. Medicare beneficiaries are urged to reach out to their agent/broker for needed assistance in deciphering the notice’s content, in advance of the open enrollment period that runs from October 15th to December 7th.
On the commercial (or “employer sponsored”) front, the annual Medicare Part D Credibility notices could be very different this year. (See previous blog post addressing this annual employer compliance requirement – https://smstevensandassociates.com/medicare-part-d-disclosure-notices-deadline-looming-2/ )With the significant benefit improvement to Medicare Part D coverage resulting from the IRA’s new, $2,000 limit, many employer plans will be deemed non-creditable, thus exposing Medicare beneficiaries enrolled in such plans to a future, premium penalty. So once again, affected Medicare beneficiaries are encouraged to review their annual Part D Credibility Notices, generally provided in October, and make the best coverage decision to avoid facing a future premium penalty. For Medicare beneficiaries that have been on the bubble about whether to remain on their employer plan, or enroll in Medicare, THIS MIGHT BE THE YEAR TO MAKE THE MOVE!
Here are some Medicare resources to help those affected navigate appropriately:
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