Medicare open enrollment for 2025 is set to begin on Tuesday.
Beneficiaries have from Oct. 15 until Dec. 7 to evaluate their Medicare coverage options and select new plans for next year.
Experts say it’s an important opportunity retirees should not ignore.
However, just 30% of people on Medicare review their options every year, according to research from KFF, a provider of health policy research.
“Every year, it makes sense to compare coverage options, because people’s needs change from one year to the next, and also plans make changes,” said Tricia Neuman, executive director for the program on Medicare policy at KFF.
“Doing these comparisons can make a big difference in terms of coverage and costs,” she said.
The new year will usher in new changes to Medicare, which means beneficiaries may want to do some careful research during this open enrollment season.
“My best advice would be to start early,” said Ryan Ramsey, associate director of health coverage and benefits at the National Council on Aging.
Changes you can make during open enrollment
During Medicare open enrollment, retirees may select new health plans and prescription drug plans.
They may switch from original Medicare, which is provided by the federal government, to Medicare Advantage plans that are privately managed. They may also switch from Medicare Advantage to Medicare original or change Medicare Advantage plans.
Original Medicare includes Medicare Parts A and B. Medicare Part A covers care provided by hospitals, skilled nursing facilities and hospice, as well as some home health care. Medicare Part B covers doctors’ services, outpatient care, medical supplies and preventive services.
Beneficiaries on original Medicare may choose to add prescription drug coverage by signing up for a Medicare Part D plan, or additional coverage for out-of-pocket costs through Medicare supplement insurance, or Medigap.
Alternatively, beneficiaries may choose a private Medicare Advantage Plan, which provides Medicare Parts A and B, and may also include vision, dental, hearing and prescription drug coverage.
Changes for 2025 that may affect coverage
In 2025, a $2,000 cap on out-of-pocket Medicare Part D costs will go into effect.
The change, which was part of the Inflation Reduction Act of 2022, is “great news” for retirees who have expensive prescription drugs they need to take, said Philip Moeller, author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs.”
However, insurance companies may try to pass on the higher Medicare Part D and other prescription coverage costs they now face because of those changes, Moeller explained. That may come in the form of higher prescription co-pays, more expensive coverage tiers for certain drugs or dropping coverage of some drugs entirely.
“This means that consumers should be really vigilant in open enrollment,” Moeller said.
Notably, the Biden-Harris administration has moved to protect beneficiaries from large increases by capping the allowable increase in Part D premiums at $35 per month in 2025, KFF’s Neuman said.
Retirees also should be on the lookout for changing Medicare Advantage coverage, Moeller said.
In some cases, private insurers may have cut out plans or moved out of geographic areas that are no longer attractive to their businesses. While retirees may be inclined to seek Medicare Advantage plans for their prescription drug coverage, they should be aware of possible changes those plans could be making that affect the total costs they will pay, Moeller explained.
Individuals who have Medicare Advantage and who want to switch to original Medicare should be aware they may not be able to purchase a Medigap policy if they have a pre-existing condition, Neuman said.
Notably, four states have protections to prevent that — Connecticut, Maine and Massachusetts and New York.
“In other states, it may be more difficult for people to disenroll from a Medicare Advantage plan and find a Medigap policy if they have a serious medical condition or even asthma, diabetes and other conditions,” Neuman said.
How to best shop around
Experts say thorough research is the best way for retirees to gauge the costs they may face on their current plans or by switching coverage.
Individuals can use Medicare.gov to compare plans or contact Medicare by phone at 1-800-MEDICARE.
State Health Insurance Assistance Program, or SHIP, programs are also available in every state and offer free in-depth, non-biased counseling, according to Ramsey.
Start now, if possible, Ramsey said.
That extra time will allow you to gather your Medicare.gov login, lists of prescription drugs and have plenty of time to review plan comparison information and ask follow-up questions, he said.
Importantly, any coverage changes do not need to be rushed, Moeller said, and you should take ample time to consider your coverage options.
“There’s no reason to rush to judgment,” Moeller said. “Even if you wait until December 7 to elect coverage for 2025 it will take effect the first of January next year.”