***Major Changes in Medicare Coming in 2025***
Due to significant changes expected in Medicare (commonly known as the red and blue card) in 2025, insurance experts advise all applicants to carefully review the various plans for 2025 as the regulations are undergoing substantial changes unlike previous years.
The most significant change is in prescription drug plans. The number of standalone Part D prescription drug plans has decreased by approximately one-fourth, reaching an all-time low. Some remaining plans have increased out-of-pocket costs for medication, while others may require additional copayments.
On the positive side, under new federal regulations, in 2025, the maximum out-of-pocket cost for Part D prescription drugs that an individual must pay is $2,000; at the same time, individuals can opt for monthly installment payments of their total drug costs within a year.
Tricia Neuman, Senior Vice President of the non-profit health policy organization KFF, told CNBC, “It’s important for beneficiaries to take the time to carefully review and compare the plans to avoid unpleasant surprises in the coming year.”
According to KFF analysis, by 2025, Medicare beneficiaries, on average, will have 34 prescription drug plan choices, two fewer than the 36 plans available in 2024.
CNN reports that while the rapidly growing market remains stable overall, insurance companies are undergoing a series of changes that may lead some seniors to seek new solutions, either preparing to pay more out of pocket or receive less supplemental insurance coverage.
Medicare is a federal government-run insurance program for seniors, disabled individuals, or those with specific medical conditions. Administered by the Social Security Administration, monthly premiums are typically deducted from Social Security benefits, with users usually needing to pay premiums, copayments, and deductibles.
The traditional Medicare, aka the red and blue card, consists of Part A (hospital care), Part B (medical services), and Part D (prescription drug plans). While not mandatory to enroll in all three for eligible applicants, registration must be completed within the specified timeframe, or penalties may apply. Part C offers Advantage plans provided by private companies approved by Medicare, which must offer certain health services while also customizing products in other aspects, such as improved prescription drug combinations or added vision or hearing care services.
Estimates from consulting firm Oliver Wyman suggest that about 8% of Advantage plans from 2024 will disappear in 2025, impacting nearly 2 million plan enrollees. Anyone not selecting a new plan will automatically be enrolled in traditional red and blue cards.
Currently, private insurance companies are reducing coverage or changing products to cope with decreasing medical insurance reimbursement rates. Analysis from private research firm ATI Advisory states that about 2 million seniors’ medical insurance plans will be terminated or no longer provide services in the counties where the users reside in 2025. They estimate that 7% of private medical insurance plan consumers will need to purchase new plans.
In 2024, over half of the red and blue card enrollees had signed up for Advantage plans.
On a positive note, according to a Medicare briefing, by 2025, the average premium for Advantage plans including prescription drug coverage is expected to decrease from this year’s $18.23 per month to around $17 per month.
Some red and blue card plans are reducing extra benefits and increasing deductibles, meaning some seniors may face higher out-of-pocket costs. Mary Beth Donahue, President and CEO of Better Medicare Alliance representing private medical insurance plans, stated that not all consumers may retain their existing plans.
There have also been some changes to the original basic coverage of the red and blue card. For details, one can refer to the official Chinese brochure “Medicare & You, 2025.” These changes include:
– According to the Biden administration’s new prescription drug policy, individuals with Part D coverage will have an annual out-of-pocket limit of $2,000, with premiums expected to decrease from $41.63 per month in 2024 to around $40 per month. Starting in January 2025, individuals can split drug costs as needed. This won’t lower costs but might make expenses easier to manage.
– Coverage for mental health and well-being is expanding, with mental health services covered by the red and blue card including marriage and family therapists, mental health counselors, and some services provided by structured day programs and intensive outpatient programs. The coverage time for the latter two is longer per day than what is offered in a doctor’s or therapist’s office.
– Support for caregivers has increased, including training for tasks related to medication and personal care. Caregivers for end-of-life care will receive some respite – up to five days at most. A new pilot program will benefit some dementia patients and their caregivers.
– Telehealth services will no longer include home visits, but some telemedicine services related to mental and behavioral health will still be available. Most telehealth services will need to be done at offices or medical facilities in rural areas. Exceptions include monthly telehealth appointments for advanced kidney disease patients, acute stroke assessment and treatment, diabetes self-management training, and medical nutrition therapy.
– Postal workers, retirees, and their families have a new insurance provider. They will leave the federal employee health benefits program and join the Postal Service Health Benefits Program.
Individuals looking to join the red and blue card should pay attention to rules and registration deadlines as late enrollment could result in penalties. For most, the initial enrollment period is the three months before turning 65 and the three months after turning 65. Subsequently, the open enrollment period lasts from October 15 to December 7 every year.