With many people rushing to complete their Medicare adjustments, it is important to understand the different parts of Medicare before making an educated decision. Jose Juarez discusses the different parts of Medicare and the most recent changes to Part D to help individuals make changes best suiting their needs.
As the Medicare Annual Enrollment Period (AEP) draws to a close, I often hear from individuals who feel rushed or unsure about their choices. Whether you’re new to Medicare or considering adjustments to your current plan, it’s important to remember—it’s not too late. You still have time to evaluate your healthcare needs and plan for the coming year.
What Are the Different Parts of Medicare?
Medicare is divided into several parts:
- Part A: Hospital insurance, covering inpatient care, skilled nursing facilities, hospice, and some home healthcare.
- Part B: Medical insurance, covering outpatient care, doctor visits, and preventive services.
- Part C (Medicare Advantage): An alternative to Original Medicare, Part C plans are offered by private insurance companies and often include additional benefits like dental, vision, and wellness programs. These plans combine Parts A and B and may include Part D coverage (prescription drugs).
- Part D: Prescription drug coverage, which helps cover the cost of medications and is essential for many beneficiaries.
What Are the Recent Changes to Medicare Part D?
One of the biggest changes for 2025 are the recent changes to Part D which include:
- Cap on Out-of-Pocket Costs: Annual out-of-pocket spending for prescription drugs will be capped at $2,000. Once your drug costs exceed this amount, you won't have to pay more for the rest of the year leading to increased premiums or changes in your plan's coverage, such as approving only generic medications.
- Elimination of the Coverage Gap Phase (Donut Hole): The coverage gap phase (also known as the “donut hole”) will be eliminated and will have a three-phase benefit: a deductible phase, an initial coverage phase, and a catastrophic phase. The initial coverage phase will extend until your costs reach the $2,000 annual cap. After this, in the catastrophic phase, you will pay $0 for covered medications (within the plan’s formulary).
- Drug Price Negotiations: Medicare will start negotiating prices for 15 specific Part D drugs, aiming to lower costs and improve access to vital medications.
- New Drug Deductible: Some plans may add a drug deductible as high as $590. Additionally, monthly premium increases will be limited to approximately $2 to help manage healthcare costs while maintaining access to necessary medications.
- Changes in Medications Formulary and Tier Levels: High-tier medications may come with increased costs and higher deductibles. It's important to check your plan's formulary to understand any changes to your medication coverage, as out-of-formulary drugs will not count toward your $2,000 out-of-pocket maximum.
- Reduction in Benefits: Please review 2025 summary of benefit for your plan’s upcoming changes.
- Plan Discontinuation: Certain plans, such as UHC’s $42 monthly PPO and Alignment 007 PPO, will no longer be available in 2025, and beneficiaries will be automatically dis-enrolled into traditional Medicare.
- MemorialCare Acceptance: Some plans, including those from Alignment and Clever, may no longer be accepted by MemorialCare starting January 1, 2025.
The Medicare AEP deadline is Saturday, Dec. 7, and any changes you make will take effect on January 1, 2025. If you need help, you can contact me at (877) 559-5622 or visit our AEP page.
About Jose Juarez, Medicare education specialist, MemorialCare
Jose Juarez is a Medicare Education Specialist at MemorialCare, dedicated to helping individuals navigate the complexities of Medicare. With a passion for empowering patients, he provides valuable insights and guidance to ensure they make informed decisions about their healthcare coverage.
