It’s Medicare enrollment; learn about changes

RALEIGH — Last fall, Chris Kinkade and his wife compared Medicare Advantage plans to find one that allowed them to see their preferred providers and covered their prescription drugs.

“We did due diligence and still picked the wrong one,” Chris, 70, said.

His wife hit the “donut hole” in May — when a person must pay more for medications until they hit the out-of-pocket maximum of $8,000 in 2024. Kinkade, who lives in Orange County, said they didn’t hit that limit in 2024, so they ended up paying more through the end of the year.

Next year, that’s supposed to change. The coverage gap will end in 2025, thanks to the 2022 Inflation Reduction Act. President Joe Biden’s hallmark law also capped out-of-pocket costs for covered drugs at $2,000 starting in 2025.

There are some worries that Donald Trump, after he is inaugurated in January, could repeal parts of the law.

Those and other changes are shaking up the Medicare landscape this year. Over 2.2 million North Carolinians are enrolled in the federal program that covers most people over the age of 65. It also covers some people younger than 65 who have disabilities or certain conditions. When you turn 65, you can either join original Medicare or Medicare Advantage, a Medicare-approved plan from a private company.

Even if those changes don’t affect someone directly, everyone needs to reassess their plan each year during the open enrollment period from Oct. 15 to Dec. 7, said Jeanne Chamberlin, coordinator for the Seniors Health Insurance Information Program at the Orange County Department on Aging.

Plans can change the list of prescriptions they cover each year. They can also change premium prices and make it harder for patients to go to their preferred pharmacy. That’s why it’s important to read the details of the annual change of notice letter that insurers send to beneficiaries each year and see if there’s a better option, said Rhonda Narron, southeastern regional manager with SHIIP.

“The last thing I want somebody to do is go to the pharmacy in January and [they] can’t get something that they need because it’s not covered,” she said.

Many people don’t compare plans. KFF, an organization that analyzes health trends and policy, found nearly seven in 10 Medicare beneficiaries didn’t compare plans during the open enrollment period in 2021. The organization also found that fewer than half of beneficiaries ever used the information resources created by federal Medicare agencies to help consumers.

What is open enrollment and why should you participate?

From Oct. 15 to Dec. 7, anyone with Medicare coverage can change their Part D plan, or prescription drug coverage plan, as well as switch to a Medicare Advantage plan if they choose. If someone is already enrolled in a Medicare Advantage plan, they can switch to a different one during this time window.

There’s also an extended special enrollment period for those affected by Hurricane Helene. That allows beneficiaries in 25 North Carolina counties that were declared disaster areas to make changes to their plan during the duration of the disaster as well as for two months after the declared end date of the disaster.

Beneficiaries can log onto Medicare.gov and see a list of plans that would work for them to compare. North Carolinians can also look up a local SHIIP counselor for their county and schedule a free appointment for unbiased advice.

Chris Kinkade went to the Passmore Center for SHIIP guidance on Oct. 30. Besides gathering new plan options, he learned which pharmacies in his and his wife’s neighborhood were preferred by the new plans and therefore had lower costs for prescriptions. For instance, he wanted to continue going to Hillsborough Pharmacy, as he likes to support the independent business.

There are 16 Part D plans available statewide for 2025. The Medicare Advantage plans offered differ by county. Urban counties are likely to have more plan options than rural ones, Chamberlin said.

Harnett County resident Shirley Yager, 72, saw the monthly premium for her prescription insurance plan jump from $5.20 in 2024 to $40.20 for 2025.

“Isn’t that outrageous?” she asked.

Yager came to her SHIIP appointment in Lillington with a plan that would seem to work for her— it covered most of her prescriptions and came with a zero dollar premium. But she was worried it seemed too good to be true.

Narron, who counseled Yager at the appointment, said the Medicare website also showed that plan was, indeed, the best option. Because the new plan’s preferred pharmacy is CVS, Yager would need to switch her pharmacy from Walmart to save more than $600.

That was a no-brainer, and Yager enrolled in the new plan. Her coverage will start Jan. 1, 2025.

What are some of the big changes to Medicare for 2025?

The standard benefit for those in traditional Medicare (which federal officials have dubbed “Original” Medicare) who have a Part D plan in 2025 will include a $590 deductible, coverage for 75 percent of allowable drug expenses in the initial coverage phase; and a $2,000 limit on true out-of-pocket spending.

Besides the $2,000 cap on out-of-pocket prescriptions and eliminating the donut hole, the new Prescription Payment Plan in 2025 will allow anyone with a Medicare drug plan or Medicare Advantage plan with drug coverage to distribute their out-of-pocket drug costs throughout the year.

If enrolled, an individual would receive a bill each month instead of paying for their drugs at the pharmacy when they pick them up. The payments may change each month.

The Inflation Reduction Act also allowed — for the first time — for Medicare to negotiate prices of some drugs with manufacturers, something that’s done in other countries that pay less for pharmaceuticals. Ten expensive, commonly used drugs covered under Medicare Part D were selected for the first cycle of negotiations, and the Biden administration announced the negotiated prices in August, according to a U.S. Department of Health and Human Services news release. Those prices will take effect in 2026.

The act also requires drug companies that raise their drug prices faster than the rate of inflation to pay Medicare a rebate.

The Trump presidency may change things, but any changes would likely not go into effect until year after next. Project 2025, a policy blueprint led by the conservative think tank the Heritage Foundation, proposes repealing the act and ending the drug price negotiation program. During the presidential contest, Trump’s campaign worked to distance him from the controversial plan.

The Inflation Reduction Act also expanded access to the Part D low-income subsidy program called Extra Help that helps people pay for premiums, deductibles and other costs. Individuals earning below 150 percent of the federal poverty limit may qualify.

Narron said she wishes more North Carolinians would look into whether they qualify for the supplement program, as it can save a lot of money.

Medicare Part D plan changes

Available drug plans change every year, and some changes are bigger than others. For instance, Mutual of Omaha will no longer offer prescription drug plans in 2025. Insurance giant Aetna will merge its three Medicare Part D drug plans to one in 2025, the company announced.

Chamberlin said one of those previous Aetna plans was popular because of its low premium. People enrolled in that plan were automatically moved to the remaining Aetna plan, which has a higher premium for most. People who don’t make a change could be in for sticker shock as a result. That’s why it’s important to read your plan’s annual notice of changes, she said.

Some plans are reacting to the changes created by the Inflation Reduction Act by reducing benefits, Chamberlin said. For example, almost all of the Medicare Advantage plans she sees in Orange County reduced dental benefits.

Some plans are also applying less expensive drugs to the deductible. Before, the customer may have had a $0 copay, but after applying the cheaper drugs to the deductible, they must start paying the retail price for those until they hit the deductible, she said.

Those costs can add up.

Comparing Medicare Advantage and original Medicare

No one plan will work for everyone — and not everyone will do better with a Medicare Advantage plan over Original Medicare or vice versa. Jeanie Schepisi, field operations manager and central regional manager with SHIIP, said one difference is that Original Medicare beneficiaries usually pay more on the front end in terms of premiums, deductibles and co-pays. Medicare Advantage plan beneficiaries often pay more on the back end for co-pays if/when they receive medical services.

That’s where the supplement Medigap can come in to help those with Original Medicare, to pick up the tab for the rest of costs.

Medicare Advantage plans also often include extra benefits such as covering dental, vision and hearing as well as additional benefits like gym memberships. Schepisi said those are like “sprinkles on a cupcake,” but the cupcake itself is most important.

“You got to make sure that your current prescription medications are covered first, and you got to make sure that your providers are in network,” she said.

Medicare Advantage plans tend to have a more limited network of providers. If someone with a Medicare Advantage HMO (health maintenance organization) plan sees a provider out of the network, they’re hit with the full cost. If someone with a PPO (preferred provider organization) plan goes to an out-of-network provider, they just have to pay a higher fee. The tradeoff? HMO plans tend to have lower premiums than PPOs.

The provider network can also change at any time. Beneficiaries of UnitedHealthcare may have watched this year as the company and Duke Health battled over contract negotiations. They reached a last-minute agreement on Nov. 1, WRAL reported, avoiding loss of coverage for more than 172,000 Duke patients.

In contrast, those with Original Medicare can go to any doctor or hospital in the country that takes Medicare.

Patients and doctors also may have to jump through more hoops to get insurance companies that run Medicare Advantage plans to agree to provide coverage, in a process known as prior authorization.

The Senate Homeland Security Committee’s investigative subcommittee released a report Oct. 17 with findings that between 2019 and 2022, Medicare Advantage companies UnitedHealthcare, Humana and CVS denied prior authorization requests for post-acute care at far higher rates than other types of care.

Post-acute care helps people recover after an acute hospitalization with services such as rehabilitation.

Regulators also found that in some cases, Medicare Advantage insurance companies portrayed beneficiaries as sicker than they really are, which increased payments to the company. Some of those companies are now paying large penalties to the federal government.

Navigating the system

It can be difficult to know which plan is best as older adults receive a slew of advertisements for plans. “People’s mailboxes are bombarded this time of year,” Narron said.

The Centers for Medicare and Medicaid Services has promised to start cracking down on agents and brokers who receive compensation or some other incentive for steering people into plans that may not be the best for them. CMS indicated that the agency is finalizing requirements that would set agents’ and brokers’ compensation at a fixed amount, so they don’t have an incentive to push someone in one plan over the other.

Still, navigating Medicare can be difficult. U.S. Congresswoman Deborah Ross (D-Raleigh) held a roundtable on Oct. 24 about protecting senior benefits, where stakeholders bemoaned the complicated nature of trying to get help, even as SHIIP appointments in more populated areas, like Wake County, get booked up quickly.

“I have four degrees, and when you enter these systems, you’re stripped of everything — your education, your abilities. You’re made to feel so stupid,” said Rose Cornelius, president of the Morrisville Chamber of Commerce, at the roundtable. “You have all these plans to choose from, and you really don’t know what to do.”