2025 Medicare Plan Changes
Significant 2025 Medicare plan changes make it ever more important for seniors to review coverage during Medicare’s Annual Enrollment Period (AEP). AEP begins October 15 and ends December 7, 2024. Failing to review your current plan(s) can cost a senior thousands of dollars and impact 2025 health coverage.
According to the American Association for Medicare Supplement Insurance two-thirds (66%) of Medicare beneficiaries do not review or change their Medicare health plan during the annual enrollment period. (August 2024 report).
Here are the 5 most important 2025 Medicare plan changes that can impact you:
- Many Medicare Advantage plans will NO longer be available.
- Drug plan coverage and costs will change on 1/1.
- A new cap on annual out-of-pocket prescription costs will impact plans and participants.
- Watch for changes to Medicare Advantage (MA) added benefits (like dental, vision).
- Insurance agent commissions increase for MA sales (to reduce ‘steering’).
2025 Medicare Plan Changes Will Impact Millions
Every year there are changes to Medicare Advantage (MA) plans. Consequently 34 million have the chance to review and improve coverage. (Source: American Association for Medicare Supplement Insurance, 2024)
Also true for those with Medicare Advantage Prescription drug plans (MAPD).
Likewise true for those with stand-alone Medicare Prescription Drug Plans. Significant numbers of seniors (23.5 million) have Medicare stand-alone drug plan coverage. (Source: American Association for Medicare Supplement Insurance, 2024)
Medicare Annual Enrollment Period (AEP) is the single best chance to compare coverage and find the best (best and cheapest) coverage for the coming year.
Medicare is NATIONAL – But Medicare Plan Choices Are LOCAL
Did you know? In Chicago, there are 58 Medicare Advantage plans to choose from. There are 65 in Dallas and 74 in Houston and Los Angeles. Add to this stand-alone drug plans and Medigap. It’s overwhelming.
That’s why the Association recommends you contact at least one local Medicare insurance agent. Our online directory lists them by Zip Code. Unlike others, NO personal information is entered to see and use the directory.
Click to find Local Medicare Insurance Advisors By Zip Code
Who Can Switch During Medicare Open Enrollment?
Individuals with “Original Medicare” (Parts A & B) can switch to Medicare Advantage (Part C) or enroll in a stand-alone drug plan (Part D). (34 million, AAMSI, 2024)
Medicare Advantage Enrollees (31 million, AAMSI, 2024)
Individuals with Stand-alone Part D drug plans. (23.5 million, AAMSI, 2024)
SIGNIFICANT CHANGE #1: Medicare Advantage Plans Stopping In 2025
Seven (7) insurers have already announced they will exit Medicare Advantage markets in 2025 according to the American Association for Medicare Supplement Insurance (as of 8/1/2024). AAMSI expects the number will continue to grow as AEP draws closer. Most cite increasing regulatory requirements and financial headwinds.
Aetna said it expects to lose up to 10% of its 4.2 million MA members in markets where it believes it can’t be profitable. (Details to be announced later).
Humana expects to exit unspecified MA markets in 2025. As of 2023, Humana had approximately 5.6 million participants enrolled in it’s MA plans.
Blue Cross Blue Shield Arizona will not offer MA prescription drug plans in Arizona.
Blue Cross Blue Shield Kansas City is exiting the MA market at the end of 2024.
Centene will exit multiple MA markets. Centene offers plans to 1.1 million Medicare beneficiaries under the brand Wellcare. Wellcare announced it will cease plans in Alabama, Massachusetts, New Hampshire, Vermont and Rhode Island.
Clear Spring Health will withdraw its MAPD plans from South Carolina and Virginia.
Cigna Group sold its Medicare business to Health Care Service Corp. for $3.3 billion in January. The deal is expected to close in the first quarter of 2025 and includes 596,977 MA members, 450,000 Medicare supplement members and 2.5 million members in part D plans. Changes are going to be likely experts predict.
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2025 MEDICARE PLAN CHANGES – #2: Every Year Medicare Drug Plans Change
Medicare drug plans change their formularies, premiums and costs for the next year. Saving money next year is the most important reason to compare plans each year during AEP.
DRUG PLAN SAVINGS POTENTIAL: According to the American Association for Medicare Supplement Insurance, the cheapest stand-alone Medicare drug plan premium is $0.00 (monthly) in 2024. The most expensive is $188 (monthly).
Other factors seniors need to watch for during AEP. Plans may choose to remove brand-name drugs from coverage if a new generic version becomes available at a lower cost.
A drug may be moved from a lower tier (lower copayment) to a higher tier (higher copayment) based on factors like increased costs or changes in clinical guidelines.
Plans may raise copayments for certain drugs due to rising costs or budget constraints.
Or, plans may lower copayments for certain high-use medication.
NEXT CHANGE #3: New $2,000 Annual Cap on Out-of-Pocket Prescription Costs
According to the American Association for Medicare Supplement Insurance, around 1.5 million Americans on Medicare have out-of-pocket costs for drugs that exceed $2,000. These individuals need to pay attention to drug plan changes.
Beginning in 2025, people with Part D plans will not have to pay more than $2,000 in out-of-pocket costs for covered prescriptions. This is a provision of the Inflation Reduction Act of 2022.
IMPACT OF THE NEW CHANGE: The cap reduces out-of-pocket expenses for beneficiaries.
However, predicts the American Association for Medicare Supplement Insurance, it may lead to higher premiums for Medicare Part D plans.
The Association predicts seniors with drug plans who take many or costly drugs will find it beneficial to switch to Part D plans that offer comprehensive coverage options.
WHY HIGHER PREMIUMS? Because insurance companies may adjust their pricing structures to account for the increased financial risk associated with covering high-cost drugs without additional cost-sharing after the cap is reached.
GOOD NEWS: This is particularly beneficial for those with chronic conditions requiring multiple or high-cost medications.
HOWEVER: Some plans may have different structures regarding how they calculate out-of-pocket costs.
Plus (as a result of the change) there may be changes in formulary listings. And, some may find that certain medications are not covered under their specific MA plan’s formulary. Or, they might face higher cost-sharinguntil they reach where the cap applies.
Changes To Added Benefits Like Dental, Vision and Hearing
Today most Medicare Advantage plans offer at least one supplemental benefit such as dental, vision or hearing.
According to the American Association for Medicare Supplement Insurance the levels of coverage can vary widely.
Examples: Dental – some plans only cover preventive care. While others might include extensive procedures such as crowns or root canals.
Vision – some plans only cover basic eye exams and glasses. Others might also include contact lenses or laser eye surgery.
Hearing – some plans cover routine hearing exams and cap the amount reimbursed for hearing aids. Others may have higher or no limits.
Insurance Agent Commissions Increased For Medicare Advantage
Insurance agents get paid when you purchase Medicare plan coverage. In the past companies also offered bonuses and incentives for selling certain plans. This was not necessarily in the consumer’s best interest. They call it ‘steering’ seniors to particular plans. Admittedly a bad practice.
In 2025 the Centers for Medicare & Medicaid Services prohibits offering incentives to salespeople to enroll people. Plus, it limits compensation to fixed caps.
In most states, that cap has been $611 for new Medicare Advantage signups and $306 for renewals. Part D plans have had lower caps: $100 for initial enrollment and $50 for renewals.
2025 Medicare Plan Changes – Info To Help Seniors
Here’s why comparing plans can be confusing. But, it can be so important. The number of Medicare Advantage plan choices available in top-10 U.S. markets (2024).
Firstly, New York City (Zip Code 10012) – 44 plans.
Secondly, Los Angeles,(Zip Code 90001) – 74 plans.
Thirdly, Chicago (Zip Code 20005) – 58 plans.
Fourthly, Houston (Zip Code 77001) – 74 plans.
Fifthly, Philadelphia (Zip Code 19050) – 68 plans.
Medicare Insurance Information Statistics Resources
Access relevant Medicare insurance statistics and information using these links.
Another key report to check is the 2024 Medicare Supplement Price Index – PLAN G. See the lowest and highest premium rates for top-10 U.S. markets.
Secondly compare PLAN N Price Index rates. Lowest and highest rates for top-10 U.S. cities.
Especially research ways to find the best Medicare insurance plan.
Likewise valuable info is our Medicare Supplement insurance statistics – what plans people turning age 65 choose.
Finally, latest info to help you find the best Medicare Plan G for 2025.
Lastly find best long-term care insurance costs – free insurance quotes.