As the Medicare enrollment period has officially opened for 2025, the Medicare Advantage plans are seeing significant changes. Starting from October 15 and running through December 7, beneficiaries can register for new plans. However, many insurance companies are adjusting their offerings in response to new federal requirements and to improve profitability, which may lead to higher out-of-pocket costs or reduced benefits for enrollees. Selecting or switching to a new plan has become quite challenging, highlighting the need for careful research.
Healthpilot, a website that assists individuals in choosing Medicare plans, estimates that around 1.5 million Medicare Advantage plans will be discontinued next year, with approximately 3.5 million beneficiaries losing their Part D prescription drug coverage. Seth Teich, the CEO of Healthpilot, remarked, “This is the biggest change we’ve seen in a decade.”
Some insurance providers are planning to drop certain plans and reduce popular offerings, such as dental coverage, while also increasing deductibles. This is their strategy to comply with federal mandates and enhance their revenue streams.
Interestingly, although the average premiums for Medicare Advantage plans are predicted to decrease next year—some plans even guaranteeing no monthly fees—other associated costs might rise. Healthpilot forecasts that the average out-of-pocket expenses for Medicare Advantage beneficiaries will increase by over $450, reaching approximately $5,929.
Beneficiaries should pay particular attention to the rising maximum out-of-pocket costs; among the major Medicare insurers, Humana is expected to see the largest increase, followed closely by Aetna and UnitedHealthcare.
Notably, significant changes are on the horizon for prescription drug plans. The number of independent Part D plans has decreased by about a quarter, hitting an all-time low. The remaining plans may have higher copays, which could lead to increased out-of-pocket expenses.
On a positive note, new federal rules stipulate that the maximum out-of-pocket expense for Part D prescription drugs will be capped at $2,000 in 2025. Additionally, beneficiaries can opt to pay their total drug costs in monthly installments over the course of the year.
However, many plans have substantially increased their prescription drug copayments. Investment bank Leerink Partners noted that among Medicare Advantage plans, UnitedHealthcare and Aetna are seeing the largest hikes in drug copay expenses.
For those wanting to check if their plan covers prescription drugs and to understand potential costs, Medicare.gov offers a helpful resource. For more detailed information, individuals can visit their insurance provider’s website to review the full list of covered medications.
