Ask The Medicare Specialist

Question from Anne: Why does Medicare have to be so confusing and convoluted every year? Can you please just explain what we can expect and need to be most aware of going into the Annual Enrollment Period (AEP) and 2025?

Answer: I've often joked, as soon as Medicare becomes simple, The Health Insurance Store is out of business. But we're busier than ever because it is so complicated, with tons of nuances that only the most caring and experienced agents can understand and navigate.

As with every AEP, much of the confusion, and even anxiousness for seniors, stems from the barrage of advertising via TV, radio, social media, mail, and unsolicited phone calls. This year, what's going to add another layer of uncertainty is the changes to how Tier 3 and 4 drugs are going be covered and the increased costs for tens of thousands of those on Medicare Advantage Plans in Western Pennsylvania.

Even though the increase in drug costs is a very significant development, in my opinion, the number one concern and what people need to be most aware of, not only those who are currently on Medicare, but especially others who will be enrolling in Part B for the first time, has always been and always will be understanding the differences between the two choices in plans, Supplements and Advantage. Failure to comprehend risks and rewards, pros and cons, can be costly in both the short and long term.

One unfortunate thing people can expect is agents making recommendations or only presenting one option based on ensuring they get a big commission. Every year it seems like we meet more and more people who've been ill advised. This is especially true for those on Supplements or retiree sponsored plans, and agents can lead people to believe an HMO or PPO works the same but is just less expensive with extra benefits that Supplements or retiree plans don't offer. Advantage Plans can be a great choice but aren't a good fit for everyone. Even when an HMO or PPO premiums are hundreds per month less than a Supplement or retiree plan, they can wind up being more costly for people with certain medical conditions. Also, going from a Supplement or retiree coverage to an Advantage Plan, or choosing an Advantage Plan when first going on Medicare is often irreversible. Far too many unscrupulous and untrained agents won't explain these facts. The Health Insurance Store never gives advice based on what or if we get paid. Our only concern is the best interests of the person who's sitting in our office, on the phone or online with us. Often that means recommending a plan that doesn't generate a commission.

As far as people currently on Advantage Plan HMOs and PPOs, who now outnumber those on Supplements, during the past four AEPs, there's been almost no reason to change from one company to another because the most popular three companies in Western PA have been so competitive and similar. But as I mentioned at the beginning of the column, there are significant changes to how Tier 3 medications are covered and their costs. Let me summarize by saying I estimate that tens of thousands of people will be paying between $500 to $1,000 more per year for a single Tier 3 drug in 2025 than in 2024. There are plans and companies where people taking the same Tier 3 drug will pay between $0 and $2,000 next year depending on what plan they have. Those who are on a fixed income or struggling due to higher costs for groceries, insurance, and utilities, really should be aware of what they'll be responsible to pay in 2025 and consider plans with the lowest prescription costs.

Which brings me to something else people need to understand and isn't often explained; There's no reason to be fearful of changing from one Advantage Plan company to another. They're all regulated to cover the same categories of medical benefits and as good or better than Original Medicare. In addition, all companies must accept applications from anyone who has Medicare Parts A and B. Companies also can't deny claims due to pre-existing conditions. In other words, if you have surgery scheduled for January 11th and the condition was diagnosed while on company X Advantage Plan and move to company Y during AEP, the new company must cover that procedure, and every medically necessary service as regulated by CMS. If you had a heart attack, cancer, or any other issue in the past, the new company can't deny any future services. Fear of changing to another plan or company is one of the most common and expensive mistakes I've seen in my 18 years in the Medicare insurance business. Far too many people remain on plans that are grossly overpriced. This is true of both Advantage Plans and Supplements.

I actually expected there to be more increases in co-pays for medical services on Advantage Plans for 2025. To my surprise, there's good news on that front as most plans had no significant changes that concern me with one exception: A good number of people will have an increase of 300% in co-pay for a 7-day or longer hospital stay that could result in a bill close to $2,000. We don't recommend plans with that kind of exposure for an inpatient hospitalization.

Please be advised that my columns are written to provide general information and not meant as a substitution for a one-on-one consultation with a licensed agent, nor are they intended to sway your decision in enrolling in an Advantage Plan versus a Supplement or as an endorsement of any particular Advantage Plan or company.

I will continue to discuss all sorts of Medicare topics as the column continues to run weekly. If you enjoy them, we also have a Facebook group with the same title as the column and run two weekly series that are also very educational. "Truths, Tips, and Tricks" focuses on some lesser-known Medicare rules, regulations, or intricacies, and how to navigate them and "Feel Good Fridays" agent accounts of positive interactions with our clients how we helped them solve problems or issues.

If you have a question for a future column or one of a more personal nature, feel free to reach out to the office or email me personally; [email protected].