One big consideration this year: The new out of pocket maximum for prescription drugs
DALLAS — Shopping season is upon us once again, so the pressure is on to find your perfect Medicare plan. I know…that’s not as fun as holiday gifts. But it is so much more important. And enrollment ends on Dec. 7. Don’t push it to the last minute, though, because there may be weighty choices to make and research to be done.
One huge consideration, especially for people new to Medicare, is whether you opt for original Medicare or one of the popular Medicare Advantage plans that are offered by traditional insurance companies. Medicare offers this comparison/contrast sheet between the two, explaining the difference in costs, coverages and benefits.
Challenges and complications when switching from Medicare Advantage to original Medicare
The decision on which kind of Medicare plan (original or advantage) you want in the very beginning is critical. That’s because switching later, let’s say from an advantage plan to original Medicare, can create complications and consequences.
This is especially an issue with Medigap insurance, which can help enrollees in Original Medicare to cover some costs the program does not cover. The potential complications of switching to Original Medicare from Medicare Advantage are explained here and here. The takeaway: Make sure you understand the Medicare Advantage trial period before signing up for the first time.
A word about the enticements in Medicare Advantage plans
Many Medicare Advantage plans include enticements like gym memberships and dental coverage. Those perks can be great, but one expert cautions that you want to remember your primary mission when you are deciding.
Scott Chase, a board certified health law attorney and board member at The Senior Source says, “Those benefits that were being offered by some of these Medicare Advantage plans…are ancillary things. Obviously you want to make sure that your coverage is where it should be for your medical.”
Chase says you want to make sure your doctors accept the plan you are choosing because that can change yearly. Also, many people may avoid it, but he recommends this as a starting point: “Go on the medicare.gov website. There is an architecture to it…a process…it’s organized. The first time I did it, it took me a while. But at a certain point it was like, oh, this makes sense! So, you type in your needs, you type in your ZIP code and up pops all these choices.”
Chase chose original Medicare when he personally signed up ten years ago and stayed on it.
“And I’m inviting all my friends to stick with traditional Medicare. It’s easy to navigate. You don’t have the risk of a Medicare Advantage plan going out of the market and or terminating your doctor.”
But many people find that an advantage plan is best for them.
Getting help with enrollment
Sometimes the choices can seem overwhelming. So you might want to enlist the help of fellow enrollees you know or family members.
And you can contact the experts at The Senior Source to find answers as well. Click here to find their contact information and to learn more about their final “Medicare Enrollment Open House” event of the season on Thursday, December 5, 2024.
The new cap on prescription out-of-pocket costs
With the new year approaching, there is a valuable gift waiting for enrollees who spend a lot of money on prescription drugs each year.
A new provision from the 2022 Inflation Reduction Act (IRA) kicks in in January. In 2025, Medicare plans will have an out-of-pocket cap for prescription drugs. Thanks to that, you won’t pay more than $2,000 in the whole year for all of your Part D prescription drugs. Many people pay a lot more than that out of pocket.
One analysis from a recent year found that Texas has the third most beneficiaries on Medicare plans who will benefit from this cap: 110,000 of them who were paying more than $2,000 per year for prescriptions.
And by the way, you can break that $2,000 burden into monthly payments instead of having to pay huge chunks up front. So, relief for many in 2025. But will the benefit be around after that? With soon-to-be Republican control of the White House and both chambers of Congress, could the IRA (which was a Democratic priority) be under threat and something that beneficiaries will need to keep an eye on?
Health law attorney Scott Chase said he thinks it could. Despite rhetoric during the presidential campaign, it isn’t totally clear whether the new benefit will later be stripped away.
But something else to look for, says Chase: “I think 2026 is going to be the turmoil of the policy changes”. He said he believes that because of the power shift in D.C., we may see big changes with Medicare in general when enrollment happens next year.
Before we concern ourselves with that, though, get enrolled for this year by the Dec. 7 deadline. And know that the $2,000 maximum out of pocket for Part D prescriptions will be in effect starting in January.