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If you\u2019re on Medicare, you\u2019ll be getting one or two Annual Notice of Change letters in your mail or email this September about your 2025 coverage and costs. You may be tempted to ignore what looks like junk, as nearly a third of recipients do<\/a>, according to an eHealth survey.<\/p>\n Don\u2019t.<\/p>\n \u201cSo often, a person who is quite happy with their plan and doesn\u2019t bother to look at their Annual Notice of Change then gets a nasty surprise in January\u201d when the plan\u2019s new costs and coverage kick in, says Danielle Roberts, author of 10 Costly Medicare Mistakes You Can\u2019t Afford to Make<\/em> and founding partner of Boomer Benefits, which sells Medicare policies.<\/p>\n An Annual Notice of Change from your Medicare Part D prescription drug plan<\/a> or a private insurer\u2019s Medicare Advantage plan<\/a> lays out how much your premiums, deductibles and copays will differ in the year ahead and whether the plan will even be offered. (Medigap<\/a> plans don\u2019t send these notices because they don\u2019t change much year to year.)<\/p>\n An Annual Notice of Change from your Part D plan also says whether your prescriptions will be covered and if so, how much you\u2019ll pay. A Medicare Advantage Notice of Change will tell you if your doctors and hospitals will remain in the plan\u2019s network.<\/p>\n While this information is always essential to make smart choices during Medicare\u2019s eight-week Open Enrollment <\/a>period (Oct. 15 \u2013 Dec. 7), experts say reading your Annual Notice of Change is especially important in 2024.<\/p>\n \u201cThere is an excellent chance that something is changing on your plan,\u201d says Roberts. \u201cThis year, more than ever, we can expect big changes in the plans.\u201d<\/p>\n That\u2019s largely due to a major Medicare change coming in 2025<\/a>: the new $2,000 cap on out-of-pocket costs for prescriptions covered by a Part D plan.<\/p>\n Since Part D health insurers will be on the hook for more prescription costs due to the cap, so they\u2019ll be looking for ways to compensate.<\/p>\n That could mean higher premiums (currently $43 a month<\/a> for standalone plans, on average, according to KFF), deductibles and co-pays\u2014possibly substantially higher than in 2024.<\/p>\n \u201cI have been very, very concerned about what the $2,000 cap was going to do to Part D premiums,\u201d says Roberts.<\/p>\n The prescription drug change in 2025 could also lead to your Part D plan no longer covering certain medications you take or raising prices of ones it will.<\/p>\n Medicare Advantage plans\u2014some facing profit squeezes currently\u2014often include Part D coverage, so they may respond to the $2,000 cap by trimming or eliminating benefits to keep their popular $0 premiums intact, experts expect.<\/p>\n As a result, your Medicare Advantage benefits that Original Medicare can\u2019t offer\u2014such as dental<\/a>, vision<\/a>, hearing<\/a>, and gym memberships\u2014could be less attractive than in 2024, or possibly gone entirely.<\/p>\n \u201cIt really will be important to understand what\u2019s changing in the coming year in my current plan and does the plan still fit?\u201d says eHealth CEO Fran Soistman. \u201cDoes it still provide the value that it did when I elected to go in it in the first place?\u201d<\/p>\n Your Annual Notice of Change will tell you\u2014if you can understand it.<\/p>\n Only 36% of Medicare beneficiaries surveyed by eHealth said their Annual Notice of Change letter is \u201creadily understandable.\u201d<\/p>\n Figure on spending about 30 minutes closely reading your Annual Notice of Change to see exactly what will be different in 2025 and whether you\u2019ll want to switch plans or coverage next year as a result.<\/p>\n During Open Enrollment, you can switch<\/a> from your current Part D plan to another, from your Medicare Advantage plan to another, from Medicare Advantage to Original Medicare as well as from Original Medicare to a Medicare Advantage plan.<\/p>\n But don\u2019t feel compelled to switch plans just because your Annual Notice of Change says your premium will go up a little or a benefit will be trimmed slightly.<\/p>\n \u201cIf there\u2019s a modest benefit decrease or premium increase, but they\u2019re satisfied with what the carrier is providing, people shouldn\u2019t make a change,\u201d Soistman says.<\/p>\n However, he added, if a medication you take will no longer be covered or your physician or hospital won\u2019t be in network, that\u2019s an important change that may persuade you to switch coverage.<\/p>\n The Medicare Plan Finder on Medicare\u2019s site (Medicare.gov<\/a>) will let you compare Part D and Medicare Advantage plans for 2025.<\/p>\n And, as Philip Moeller writes in his forthcoming book, Get What\u2019s Yours for Medicare<\/em><\/a>, if your Medicare Advantage plan won\u2019t include your favorite doctor or hospital in its network in the year ahead, it\u2019s legally obligated to work with you to identify other physicians or hospitals in its network that you\u2019d like.<\/p>\n To help prevent drastic Part D premium increases, the government\u2019s Centers for Medicare and Medicaid Services recently threw a bone to health insurers with a premium-stabilization plan.<\/p>\n Medicare will provide a special subsidy to those insurers for 2025 in exchange for avoiding slapping members with exorbitant premium hikes.<\/p>\n \u201cIt should take what might have been a 40%, 50% or higher premium increase down to probably 25%,\u201d says Soistman. \u201cIt\u2019s still going to be a bit of sticker shock when some people see how their premiums changed.\u201d<\/p>\n Roberts says, \u201cI\u2019m still somewhat concerned about premiums, but I feel a little better after the stabilization program announcement.\u201d<\/p>\n After reading your Annual Notice of Change, you may want to get help deciding on the right Medicare plans for 2025 and to understand the implications of coming changes to your plans.<\/p>\n You can ask a Medicare broker or agent for assistance; there\u2019s a directory<\/a> at the National Association of Benefits and Insurance Professionals site. The sooner you do, the better, since agents and brokers will be swamped near the end of Open Enrollment.<\/p>\n \u201cAt Boomer Benefits, we have to stop taking new requests after Thanksgiving,\u201d says Roberts.<\/p>\n If one of your prescriptions won\u2019t be covered by your Part D plan in 2025, call your doctor to see if another covered medication would be okay or if you should find a new plan that includes it, Roberts advises.<\/p>\n\nWhat is an Annual Notice of Change<\/strong><\/h2>\n
Surprising effect of the $2,000 prescription-drug cap<\/strong><\/h2>\n
Reading and understanding the Notice of Change<\/strong><\/h2>\n
A new program to help avoid big premium hikes<\/strong><\/h2>\n
Getting help if your Medicare plan will change<\/strong><\/h2>\n