Medicare enrollees should check their mail for this letter from their insurers

Medicare beneficiaries with plans through private insurers should be keeping a close eye on their mail.

Each year, Medicare enrollees with prescription drug coverage through a standalone Part D plan or a Medicare Advantage plan receive an annual notice of change by the end of September. These notices lay out adjustments to premiums, benefits, prescription drug coverage and provider networks that take effect the next year.

The notices are important because they guide beneficiaries in making decisions during Medicare’s open enrollment period, which runs Oct. 15 through Dec. 7. During this time, enrollees can switch between traditional Medicare and Medicare Advantage, or adjust their prescription drug or supplemental coverage.

Industry experts say rising health care costs and ongoing financial pressures on insurers are contributing to adjustments in plan design, premiums and benefits. In Oregon, roughly 809,000 people are enrolled in Medicare Advantage or Part D coverage.

“Seniors can expect higher medical costs, fewer plan options and less benefits,” said Diane Faligowski, the CEO of Health Plans in Oregon, an independent agency that works with residents on Medicare choices. “Many plans are changing or getting canceled, so more than ever people need to pay attention and check their mail for the Annual Notice of Change.”

Faligowski said Providence Health Plan, for example, is discontinuing some point-of-service (POS) plans, which give members flexibility to choose between in-network and out-of-network providers.

Major insurers are also retrenching. UnitedHealthcare, the nation’s largest Medicare Advantage insurer, announced it will end certain PPO plans, affecting about 600,000 members. Humana expects to lose roughly 550,000 members as it eliminates unprofitable options, and Aetna is closing about 90 plans across 34 states. Those impacted will learn about it in their letter.

Part of the pressure comes from reforms in the Inflation Reduction Act of 2022, which aimed to make prescription drugs more affordable.

The law placed an annual cap on out-of-pocket spending for prescription drugs. The limit next year is $2,100, which includes what an individual pays in deductibles, copays, and coinsurance for covered drugs. After hitting that maximum, beneficiaries pay nothing for the rest of the year.

The law also gave Medicare the authority to negotiate prices on high-cost drugs. The first 10 drugs with negotiated prices — including Eliquis, Entresto, Jardiance and Imbruvica — will see lower costs beginning next year.

Faligowski said these reforms, however, are affecting insurers’ finances, and they’re adjusting their plan plan structures in response. For beneficiaries, this may mean changes to which drugs are covered, pharmacy pricing and cost-sharing methods. More Medicare Advantage plans, for example, are also shifting from flat copays to coinsurance, where enrollees pay a percentage of the drug cost, she said.

Carisa Dickson, a program specialist for the Senior Health Insurance Benefits Assistance and Senior Medicare Patrol programs in Multnomah County, said seniors who have already received annual notice of change letters are seeing cost increases and changes to benefits.

“People are already calling us because they’re seeing that their plan’s monthly costs are going up next year and they need to find a new drug plan,” she said.

Those enrolled in Medicare Advantage should pay especially close attention, she said. Some may learn their plans are being discontinued. Beneficiaries dropped from Medicare Advantage can move back to traditional Medicare and buy a Medigap policy without insurers reviewing their medical history. Those people will also have extra time to shop during the special enrollment period, from Dec. 8 through the end of February.

Medicare beneficiaries can schedule free appointments with local counselors through Oregon’s Senior Health Insurance Benefits Assistance program, which trains specialists to help seniors navigate Medicare’s complex choices.

The Oregonian/OregonLive will publish its annual Medicare Guide later this month to help readers compare plans and understand their options.

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