Get informed: Reviewing your Medicare prescription drug plan is more important than ever

A cap on the amount of money Medicare beneficiaries will pay for medicines beginning in 2025 will be a welcome change for some.

But experts expect premiums to rise up to $300 a year — and they say it’s critical to review the changes your insurer plans to make so you can make better choices.

Open enrollment, a period in which Part D/Medicare Advantage beneficiaries can sign up for, change, or drop their plan, begins Oct. 15 and ends Dec. 7. During that time, certified and unbiased volunteer counselors from AgeWays Nonprofit Senior Services’ Michigan Medicare Assistance Program will be on hand to help you review your plan and if need be, help you enroll in a plan that could save you money and better serve your health needs.

AgeWays will be offering these free benefit reviews via phone and Zoom and also at in-person Medicare assistance events scheduled at community venues around Macomb and Oakland counties. To find a list of in-person events or make an appointment for a review, call 800-803-7174. A list of in-person events is also available on the AgeWays website.

Too many seniors don’t review their plan

From year to year, Medicare Advantage plans can change premiums, cost-sharing requirements, provider networks or prior authorization requirements.

Yet, millions of people with these plans don’t review them each year.

A recent survey by the Kaiser Family Foundation showed that over 40% of Medicare Advantage beneficiaries — about 30 million people — did not review their plan during open enrollment in 2022. That means they may have lost out on savings and may have even lost the health care provider they trusted. Minorities and Medicare enrollees ages 85 and older were less likely to review their plans to see if they made financial and medical sense.

Big changes coming to drug costs

This year, it is more important than ever to take a deeper look at your Plan D or Medicare Advantage plan.

Because of the Inflation Reduction Act of 2022, Medicare beneficiaries will see a $2,000 annual out-of-pocket cost cap for prescription drugs.

Once that cap is met, they won’t have to pay any extra on copays or coinsurance. Under the new law, they also can spread the cost over the course of a year until the $2,000 is paid off.

Most insurers, however, will likely raise premiums in order to compensate for the reduction in drug prices.

And at least two major health insurers are pulling out of the Medicare Advantage market.

Humana is ending Medicare Advantage for some half-million customers, mainly in the southeastern U.S., citing the new, higher cost of providing health care. CVS Health Aetna also is preparing to pull out of some markets.

“Because of this, it’s more important than ever this year that people review their plans,” says Shari Smith, manager of the Michigan Medicare Assistance Program. “Those who have a Medicare Advantage plan through Humana should make sure to read the notice of creditable drug coverage they received in the mail by Oct. 15. Otherwise, they might find themselves without a prescription drug plan come January. We are encouraging everyone to review their plans carefully this year. Our counselors are available to assist with this.”

Even those with a Part D or Medicare Advantage plan whose drug costs are low will see higher premiums because of the new cap, Smith says

Relief in sight?

The Inflation Reduction Act allows Medicare to negotiate directly with drug manufacturers. Beginning in 2026, the prices of 10 popular medications could fall.

That could lead to lower out-of-pocket costs to offset higher premiums.

“However,” says Smith, “with the $2000 cap on prescription drugs, it is unclear as to the impact these reductions will have.”

This content is provided by AgeWays Nonprofit Senior Services (formerly the Area Agency on Aging 1-B), a nonprofit that serves older adults and family caregivers in Livingston, Macomb, Monroe, Oakland, St. Clair and Washtenaw counties. We provide services, programs and resources that are designed to help seniors age safely and independently. Call us at 800-852-7795 to get connected.