How to Make Smart Choices About Medicare Open Enrollment for 2025

For people with Medicare, if ever there was a year to take open enrollment seriously (Oct. 15 to Dec. 7) and choose coverage carefully, this is it.

“This is going to be a challenge,” says Philip Moeller, author of the recently revised and updated “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs,” which will be released October 8.

And, says Moeller Fortune, Don’t assume that the Medicare plans you have in 2024 will necessarily offer the same coverage and costs in 2025. “I think such assumptions are dangerous,” he notes.

Yet, according to a recent analysis by health care research service KFF, 69% of people with Medicare and 82% of people 85 and older have not compared their coverage options in a recent period. open registration.

Open enrollment is when Medicare beneficiaries can join, change, or drop out of a Part D prescription drug plan for the upcoming year. Or they can do the same for a private insurer’s Medicare Advantage plan (the alternative to traditional Medicare plus a Medigap supplement plan); Some Medicare Advantage plans include Part D drug plans.

This is also the time when someone with a Medicare Advantage plan can switch to traditional Medicare, although there is a catch, as you’ll see below. (There is another open enrollment period from January 1 to March 31 reserved for people with Medicare Advantage plans who want to change plans or move to traditional Medicare.)

The average Medicare beneficiary can choose from 21 stand-alone Part D plans and 43 Medicare Advantage plans, according to KFF.

Below, Fortune spoke with Moeller, who gives his advice on how to make smart choices for 2025 coverage.

Fortune: Why will this open enrollment be difficult?

Philippe Moeller: Provisions of the Inflation Reduction Act of 2022 have triggered a number of changes to Part D drug plans whose greatest impact will be felt in 2025.

Most notable is the $2,000 limit to pay for medications. For those taking expensive medications, this is a godsend. However, insurance companies will try to do everything they can to recoup lost revenue. So this will trigger a number of possible changes to the Part D plans.

Fortune: Like what?

Moller: We don’t know the details yet. They will not be announced (by Part D plans) until early October… What concerns me, on behalf of consumers, is that some Part D plans will drop coverage for certain medications.

For example, the very expensive drugs I take will no longer be on my Part D plan formulary (the list of drugs covered by a Part D plan) next year. I will have to look for either another drug plan, or perhaps even another medication, to meet my needs.

Fortune: How else might Part D plans change due to the $2,000 cap?

Moller: Annual deductibles may increase, co-pays may increase, drugs may be moved from one level (of the formulary) to a more expensive level.

The cumulative result of this is that people really need to use Medicare Plan Finder, the online tool offered by Medicare. He will review the different Part D plans and then give you rough estimates of how much those plans cost annually for the drugs you take.

I say to people, “Would you like to spend half an hour on this to save several hundred dollars?” They nod, then they don’t.

Fortune: Another change for Part D plans in 2025 is the new Medicare prescription payment plan. Can you explain it?

Moller: This was a provision of the Inflation Reduction Act intended to equalize the financial consequences of drug spending with Medicare by spreading the cost of drugs over the year.

Insurance companies are supposed to administer this program. Your pharmacy will not collect the money. I think this is going to create a lot of confusion that people will have to struggle with in 2025.

Fortune: People may not know that if they sign up for the payment plan, they will receive two bills each month from their health insurance plan: one is for the drug bill and the other is for the premium. Is there anything you want people to know about this?

Moller: This is something that people need to be aware of. This could further benefit Medicare Advantage plans, which have the merit of being a one-stop shop.

Fortune: Another change people should think about during open enrollment is that starting next year, traditional Medicare will no longer cover telehealth visits unless you’re in a rural area. Medicare Advantage plans will be able to. What should people know?

Moller: Medicare covered telehealth during the pandemic, but that coverage expires in 2024. I think that’s a bad thing.

I think telehealth has proven to be very helpful for people. I don’t really know how (the change in telehealth coverage) is going to play out.

Fortune: Medicare just launched a program for insurers designed to keep Part D premiums from rising largely because of the $2,000 cap. What do you think will be the result?

Moller: I think they will make the rising costs of the stand-alone Part D plan less of an issue for people next year. Medicare Advantage plans can use government subsidies to offset the cost of coverage, and they do this largely with their Part D drug plans.

Fortune: Insurers say some Medicare Advantage plans have been financially restricted lately. How will this affect the availability of plans for 2025?

Moller: For the first time in more than a decade, the bloom is off for Medicare Advantage plans. Consumption returned to high levels after the pandemic. Medicare Advantage plans face profitability challenges in some areas of the country.

As a result, some insurers are withdrawing from Medicare Advantage markets across the country. I think consumers need to be vigilant and carefully check whether their current coverage will still be what they want next year.

Fortune: When you combine the economics of Part D plans and Medicare Advantage plans, what does it all mean for people during open enrollment?

Moller: I think consumers will have to pay a lot more attention to what they have done in the past, because the consequences of not doing so will be serious. You might wake up on January 1st of next year and say, “Oh, my drug is no longer covered by my Part D plan.” Or “My Medicare Advantage plan responded to financial pressures by reducing its provider network.” approved care.”

Fortune: Do you expect to see Medicare Advantage plans cut benefits altogether? Or prune them? Or just charge them more?

Moller: Yes, yes, and yes.

You’re going to have to do your homework to see if these benefits have been reduced.

Fortune: Will we still see $0 premium Medicare Advantage plans for 2025?

Moller: Most Medicare Advantage Part D plans are expected to still have $0 premium plans in 2025, which is very attractive to people and in some ways will make Medicare Advantage plans more attractive.

Fortune: A key decision people will have to make during open enrollment is: should they opt for traditional Medicare and a Medigap plan or opt for Medicare Advantage? How should they make this decision for 2025?

Moller: If you have traditional Medicare, you should review your Part D coverage and see if you can improve it or if you need to switch to Medicare Advantage with a Part D plan.

Medicare Advantage plans have out-of-pocket caps that can protect people from catastrophic costs; This is the role Medigap plays in traditional health insurance.

There is no doubt that the traditional Medicare plan combined with a Medigap plan is more expensive than a Medicare Advantage plan. The questions are: what would your overall costs be and will your coverage provide the type of benefits you need?

I say in the book that for middle-income and financially higher-income people, I think Medicare and a Medigap plan are the best combination of coverage. For others, especially low-income people and early retirees who have minimal health care costs, I think Medicare Advantage can be a very attractive alternative.

Fortune: But some people may encounter problems if they want to switch from a Medicare Advantage plan to a traditional Medicare plan and a Medigap plan. Can you talk about it?

Moller: If you want to switch from Medicare Advantage to traditional Medicare, you may have difficulty getting a Medigap plan on the same favorable terms as when you first became eligible for Medicare.

Medigap has guaranteed access rights that last only six months after you become eligible for Medicare.

So if you think you might want to switch from Medicare Advantage to traditional Medicare, check out the Medicare Plan Finder and Medicare Supplement plans. Then contact them and find out: “Would you cover me if I came back and how much would you charge me?” »

Fortune: How about using a Medicare agent or broker to purchase a Part D plan, Medicare Advantage plan, or Medigap plan?

Moller: Don’t be too reluctant to do business with an insurance broker. Just be aware that the insurance broker works for themselves, not you, and the policies they give you access to may not fully reflect all plans you might have access to.

Fortune: What about when people should make their Medicare open enrollment decisions? I just received my annual Part D change notice and it states that the insurer will not reveal what drugs are on their formulary until mid-October.

Moller: I urge people to take their time. Wait until November 15^th to make an informed decision.

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This story was originally featured on Fortune.com