Medicare 2025 Updates: Lower Drug Costs and Fewer Advantage Plans

As we approach 2025, those who have Medicare should already be thinking about their plans for next year. Around 67.4 million people eligible for Medicare have received their Medicare & You 2025 handbook and the Annual Notice of Change (ANOC).

These documents are important because they provide updates on changes to coverage, benefits, costs, and more. Here’s a breakdown of the most important changes that will affect Medicare beneficiaries in 2025.

Changes to Medicare Advantage Plans

One of the biggest changes in 2025 will be the reduction in Medicare Advantage plans. Medicare Advantage is a private insurance plan that combines parts of Medicare.

Due to rising healthcare costs and updates from the Centers for Medicare and Medicaid Services (CMS), many plans will be discontinued. For example:

• Wellcare will stop offering Medicare Advantage plans in six states: Alabama, Massachusetts, New Hampshire, New Mexico, Rhode Island, and Vermont.
• Humana will exit 13 markets across the country.
• CIGNA will cut back on its Medicare Advantage plans in eight states.
• Aetna will also drop some of its Medicare Advantage plans.
• CVS plans to reduce its benefits and geographic presence next year.

This means fewer options for many beneficiaries, and it’s important to check the ANOC to understand how your plan is affected and look for other options.

Annual $2,000 Cap on Out-of-Pocket Drug Costs

A significant change in Medicare Part D (the part of Medicare that covers prescription drugs) is the $2,000 annual cap on out-of-pocket drug costs. This was made possible by the Inflation Reduction Act of 2022.

Now, people who are enrolled in Part D will pay no more than $2,000 per year for prescription drugs. This is great news for people who take expensive medications.

However, there are some things to keep in mind:

• Part D premiums will increase to cover this new cap.
• The $2,000 cap is for drugs covered by your plan. If a drug isn’t covered, you’ll still have to pay its full price.
• The monthly limit for high-cost medications will be $167.

Gender-Neutral Pricing for Medigap

Another important change in 2025 is gender-neutral pricing for Medigap plans. Medigap is a type of insurance that helps cover costs not paid by Medicare. Until now, women typically paid lower premiums than men for the same Medigap plan.

However, this has been considered unfair under the Affordable Care Act, which requires that pricing be the same for both men and women. As a result:

• Women’s Medigap premiums will increase in 2025 to match the prices that men have been paying.

This change means that women may see their premiums rise, while men’s premiums may stay the same or go down, depending on where they live.

What Should Medicare Beneficiaries Do?

The most important action for Medicare beneficiaries is to carefully review the ANOC and explore other options if your current plan is being discontinued or altered.

It’s essential to make sure you have the coverage you need for the coming year. You should look for a plan that will continue to meet your healthcare needs in 2025.

Medicare is making several important changes in 2025, including the reduction of Medicare Advantage plans, the $2,000 annual cap on prescription drug costs, and gender-neutral pricing for Medigap.

These changes will affect millions of beneficiaries, so it’s crucial to stay informed and take action before the new year begins. Make sure to read the Medicare & You 2025 handbook and Annual Notice of Change to understand how these changes will impact your healthcare.