3 important changes to Medicare will be necessary for you in 2025

For Medicare, it won’t be a few months until the end of the year and the calendar turns to 2025. The program’s administrator, the Centers for Medicare and Medicaid Services (CMS), has revealed two major changes for 2025 that you should be aware of. Medicare will also make significant changes to the maximum amount beneficiaries must pay out-of-pocket for their approved prescriptions starting next year.

Here’s the lowdown on these three ways Medicare will operate differently in 2025 and what they’ll mean for you.

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1. A crackdown on agents and brokers who sell three types of Medicare policies

Currently, when salespeople enroll Medicare patients in Part D prescription drug plans, Medigap (Medicare supplemental insurance), or Medicare Advantage plans (which are private insurance companies’ alternatives to traditional Medicare), they can receive incentives such as foreign vacations and large bonuses.

CMS wants to stop offering Medicare Advantage and Part D plans with sales incentives by 2025. In a statement, Senate Finance Committee Chairman Ron Wyden (D-Ore.) said, “This announcement is a big win for seniors because it strengthens protections against fraud and high-pressure marketing practices.”

According to CMS’s 1,327-page final regulation for Medicare in 2025, the goal of the new crackdown is to “ensure that agent and broker compensation reflects only the legitimate activities that agents and brokers are required to do.”

This means that salesmen can no longer be incentivized to enroll customers.

Furthermore, third party marketing organizations, or Medicare intermediaries, are prohibited by regulation from promoting incentives that “could inhibit the agent’s or broker’s ability to objectively evaluate and recommend a plan best suited to a prospective enrollee’s needs.”
According to Marvin Musick, whose website MedicareSchool.com offers Medicare insurance,

“I believe that’s a really good idea, because agents shouldn’t be compensated for choosing one particular company over another.”

In addition, the new regulation states that “administrative fees” beyond Medicare’s predetermined compensation restrictions will not be paid to brokers or agents. The maximum is $611 for new Medicare Advantage enrollment and $306 for renewal in most states. There are plans for Part D

This means that salesmen can no longer be incentivized to enroll customers.

Furthermore, third party marketing organizations, or Medicare intermediaries, are prohibited by regulation from promoting incentives that “could inhibit the agent’s or broker’s ability to objectively evaluate and recommend a plan best suited to a prospective enrollee’s needs.”
According to Marvin Musick, whose website MedicareSchool.com offers Medicare insurance,

“I believe that’s a really good idea, because agents shouldn’t be compensated for choosing one particular company over another.”

In addition, the new regulation states that “administrative fees” beyond Medicare’s predetermined compensation restrictions will not be paid to brokers or agents. The maximum is $611 for new Medicare Advantage enrollment and $306 for renewal in most states. There are plans for Part D plans have had lower caps: $100 for initial enrollment and $50 for renewals.

The government will pay an additional $100 for new enrollees in Medicare Advantage and Part D plans in 2025, triple the amount CMS originally proposed.

According to Musick, “It’s more than most people in our business would expect.”

The Center for Medicare Advocacy and the Center for Medicare Rights, two consumer advocacy organizations, believe that brokers and agents will have strong incentives to push consumers into Medicare Advantage plans despite recent regulatory reforms.

This is due to the fact that the regulation will still allow salesmen to charge much more for these plans than for stand-alone Part D prescription drug plans, which some traditional Medicare beneficiaries purchase in addition to Medigap insurance.

According to David Lipshutz, associate director of the Center for Medicare Advocacy, “It’s not really going to address the problem of pushing people to Medicare Advantage.” “In my view, that would prevent or deter individuals from being directed to a particular scheme because that agent or broker is trying to get a particular bonus or other incentive.”

According to Philip Moeller, author of the forthcoming book Get What’s Yours for Medicare, the new regulation “only reinforces the need for consumers to ask some basic questions when dealing with a broker.”

He pointed out that agents and brokers only provide a limited number of Medicare Advantage, Part D and Medigap plans that are offered in the region.

After learning which plans your broker might sell, Moeller suggests you “look at the available products in your zip code and see what’s missing” from the vendor selection using Medicare’s Plan Finder.

2. A new midyear notification to Medicare Advantage policyholders reminding them about their plan’s unused supplemental benefits

This is because participants in these programs frequently do not use certain benefits.

This is somewhat unexpected because Medicare Advantage programs frequently highlight dental, vision, hearing and fitness benefits that traditional Medicare cannot. According to CMS, most Medicare Advantage plans offer at least one additional benefit, with the average amount offered being 23.

However, according to Commonwealth Fund research published in February 2024, 3 in 10 Medicare Advantage participants did not use any of their extra benefits compared to the previous year. Additionally, “some plans have indicated that enrollee use of many supplemental benefits is low,” according to a statement released by CMS on its 2025 rule.

In 2022, the Commonwealth Fund found that individuals were the primary factor in making choices Medicare Advantage plan over Traditional Medicare.

As a result, members of Medicare Advantage plans will begin receiving a customized “Mid-Year Enrollment Notification of Unused Supplemental Benefits” each July beginning in 2025. It will provide a comprehensive summary of all unused supplementary benefits, their scope and costs. Costs associated with claiming each, guidance on how to avail benefits and customer support numbers for further enquiries.

While Musick welcomes the decision, it wants Medicare Advantage recipients to receive these letters on a quarterly basis.

Moller believes it may be preferable if plans send out letters in March to “give people more time during the year to take advantage of themselves.”

Why aren’t Medicare Advantage enrollees using their extra benefits?

No one can say for sure as reliable statistics are not available. According to Lipschutz, “The Medicare Payment Advisory Commission has stated that CMS does not have reliable data on enrollees’ use of supplemental benefits.”

Three possible explanations, according to experts, could account for the limited use of additional benefits.

One is that Medicare Advantage enrollees cannot find a preferred physician or dentist within their coverage network. Therefore, the cost may be prohibitive or they may not be able to obtain coverage to see their chosen medical providers.

Another explanation could be that the added benefit is insufficient.

According to Lipschutz, “The amount of dental benefit is sometimes one or two cleanings per year, so it’s not much of a benefit.”

A third possibility is that plan participants may not be aware of their additional benefits or how to use them.

According to Lipschutz, plans have a strong incentive to promote benefits when trying to get consumers to enroll, but less incentive to help them access those benefits after they enroll.

Additionally, he says, “there’s only a whole subset of benefits for certain individuals with certain chronic conditions.”

3. The new $2,000 annual cap on out-of-pocket prescription costs.

In general, in 2024, you qualify for Medicare’s “catastrophic coverage,” and if your out-of-pocket prescription costs exceed about $3,300, you won’t be billed for your approved Part D drugs for the rest of the year. (In 2023, you owe 5% of the cost of your prescription even after you get catastrophic coverage.)

However, until 2025, a provision in the Inflation Reduction Act of 2022 would prevent individuals with Part D plans from paying out-of-pocket costs beyond $2,000.

According to Lipschutz, “I think it’s a big deal.”

However, this new rule does not apply to Medicare Part B pharmaceuticals out-of-pocket costs; Instead, it only applies to drugs covered by your Part D plan. Generally, Part B drugs include shots, injections prescribed by a doctor, and

In general, in 2024, you qualify for Medicare’s “catastrophic coverage,” and if your out-of-pocket prescription costs exceed about $3,300, you won’t be billed for your approved Part D drugs for the rest of the year. (In 2023, you owe 5% of the cost of your prescription even after you get catastrophic coverage.)

However, until 2025, a provision in the Inflation Reduction Act of 2022 would prevent individuals with Part D plans from paying out-of-pocket costs beyond $2,000.

According to Lipschutz, “I think it’s a big deal.”

However, this new rule does not apply to Medicare Part B pharmaceuticals out-of-pocket costs; Instead, it only applies to drugs covered by your Part D plan. Generally, Part B drugs include shots, injections prescribed by a doctor, and

In general, in 2024, you qualify for Medicare’s “catastrophic coverage,” and if your out-of-pocket prescription costs exceed about $3,300, you won’t be billed for your approved Part D drugs for the rest of the year. (In 2023, you owe 5% of the cost of your prescription even after you get catastrophic coverage.)

However, until 2025, a provision in the Inflation Reduction Act of 2022 would prevent individuals with Part D plans from paying out-of-pocket costs beyond $2,000.

According to Lipschutz, “I think it’s a big deal.”

However, this new rule does not apply to Medicare Part B pharmaceuticals out-of-pocket costs; Instead, it only applies to drugs covered by your Part D plan. Generally, Part B drugs include shots, injections prescribed by a doctor, and

In general, in 2024, you qualify for Medicare’s “catastrophic coverage,” and if your out-of-pocket prescription costs exceed about $3,300, you won’t be billed for your approved Part D drugs for the rest of the year. (In 2023, you owe 5% of the cost of your prescription even after you get catastrophic coverage.)

However, until 2025, a provision in the Inflation Reduction Act of 2022 would prevent individuals with Part D plans from paying out-of-pocket costs beyond $2,000.

According to Lipschutz, “I think it’s a big deal.”

However, this new rule does not apply to Medicare Part B pharmaceuticals out-of-pocket costs; Instead, it only applies to drugs covered by your Part D plan. Generally, Part B drugs include shots, injections prescribed by a doctor, and outpatient prescription drugs.

After 2025, the $2,000 ceiling may increase each year as it adjusts to annual Part D cost increases.

For many Medicare recipients, especially those on expensive name-brand drugs, the $2,000 restriction is expected to result in financial savings.

However, the cap is likely to have a negative impact on those who already have or are trying to obtain Part D coverage.

Experts predict that some health insurance companies will try to find ways to offset these additional, new costs. These may include higher Part D premiums and co-pays, more limits on drugs covered by plans, and more prior authorization requirements for filling prescriptions. or a combination thereof.

According to Musick, the $2,000 maximum could also convince some health insurers to stop providing Part D coverage.

“We still have to see how these plans respond to the cap,” according to Moeller. But pharmaceutical companies and Part D plans are businesses, and it’s hard to make money if you don’t sell anything.

According to Moeller, if Part D insurers reduce the number of drugs they cover because of the $2,000 cap, “there will be a lot of heat from legislators and others to hold the plans accountable.”

Here’s a guide for anyone who wants to sign up for Medicare Part D coverage in 2025: Use the Medicare Plan Finder to carefully consider your options and see if the plan covers the prescription drugs you use now.

According to Lipschutz, “ask” if your plan will pay for the prescription you want your doctor to prescribe. the plan for an exception request,” with backup from your treating clinician. “It’s worth trying,” he adds.