A Simpler Medicare Part D Is Coming. Here's How It Could Save You Money
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Welcome the sites on your host, ivana hampton. Once in a generation revamp is coming, a medics and caregivers may want to review current coverage and shop around for next year. Reforms from the inflation reduction act will lower some costs.

Meanwhile, there are some concerns health plan options could slightly shrink. Mark Miller is a morning star contributor and the retirement revised news letter publisher. He's written about what you need to know about medicare.

Open a roma for twenty twenty five. Here's our conversation. Welcome back to the podcast.

mark. Thank you. Great to be here.

Well, let's start with a quick explainer about the similarities and differences of traditional medicare and medicare.

sure. Well, when you first sign up for medicare, you're going to go down. One of these two pathway is if you're onna, sign up for the traditional medicare program, which is the basic you're interacting directly with the government with medicare or medicare advantage, which is a uh commercially offered, you know the come from insurance companies, they are kind of more comprehensive all in one ways to have your medicare coverage.

And they are typically a managed care plans, meaning like A A P P O, N H M O. So they offer kind of the convenience of one stop shopping. Some people appreciate the other aspects of its, such as extra benefits.

In some cases there, the plants come without an extra premium for prescription drugs, and you don't need a medigap supplemental policy when you're in medical advantage. So that's another cost that you typically, we have a traditional medicare, but not in medicare advantage. So is really two fundamentally different ways of getting your coverage. And each comes with some pluses analysis.

A medicare opener roll man, runs now through december seven. Why should seen years who typically roll over their plans from year to year not do that for twenty twenty five.

right? Well, i'm always agree ging people to recheck their coverage during the annual roman period, which as you mentioned, is ongoing now and ends on december seven. Every year I am arranging ing people to do IT because a coverage terms understand alone R T drug plans or in medicare advantage can change if your in traditional medicare with you know party party you and medigap you don't need to recheck that.

But it's really these privately offered plans for prescription drugs and our medical vents that always need to check with this year more so than ever. And I should say not. And if people do IT only about a third of medicine and roles actually do take the time, it's understandable.

It's a complex kind of a you know a bit of a pain to do, but can be really important to do both for containing your cost and making sure you're gonna the best fit coverage and and health care in the year ahead. This year is especially important because some really profound changes are occurring in the prescription drug program consequent to the passage of the inflation reduction act. And twenty two contain a bunch of improvements to uh, drug coverage that been phased in over the last couple years.

And next year is the year when that that's all commenting. The the biggest change is that uh this kind of former very complicated different tears of coh sharing that would escalate as if your costs get high has all been swept away and replace with a much simpler structure. So that's really good news.

And the the big headline is that nobody enrolled in party will pay more than two thousand dollars out of pocket, aside from premiums for their cost. So people who run n IT to really hide drug cost for the complex serious illnesses previous to this new cap have been a custom to paying thousands and thousands of dollars of for medications. And so this represents are really important.

I think, uh, strengthening of this insurance is much more salad insurances a result. But as a result, the insurance companies that participate in this market are reacting and making some changes in other aspects of of coverage, which we can talk about. Uh, so it's it's a year when it's really important to take a look.

And that starts with your current provider sends a what's called an annual notice of change that should have arrived either in the mail or via email already in september that summarizes any changes your coverage. You should start by looking at that and might show things like an increase in the premium you're going be charged monthly IT. IT couldn't involve a change in the deductable amount.

And very importantly, I can involve changes in the terms by which different drugs are covered. So it's really important to take a look at that. And then you can get out of the medicare plan finder, which is the government run uh marketplace for plans and log in and they should show you what your options are for the year ahead. So no, that's the best way to do IT. And there are different ways you can also reach out for in person help.

Well, let's get into the payment structure for party. What can people expect in twenty twenty five and go on for?

So yes, one concern was that drug companies were gonna ack up premiums in response to the higher costs and risks associated with that two thousand dollars out of pocket cap. And so the bite administration responded with a program that most insurance have brought into that is going to basically subsidize those insures to help keep premiums from jumping too much.

Um plans are allowed to raise the premiums up to five dollars a month, which might be a big deal or IT might not be depending what you're current premium is, is in terms of what the precise increase on that will be. But you want to take a look at, at that. Um there are changes to the amount of a deductable amount that the plans can have.

And um so it's called the deductable phase of coverage. The plants are premier to have a deductable of no more than five hundred ninety dollars next year, but you may find plans that offer Better deals than that. Um and then also during the first phase of coverage, up to two thousand dollars, plans are permitted to charge you up to twenty five percent of your overall drug costs. But again, you may find plans to offer a Better deal. So those are some of the elements, uh, to keep an eye on there.

So let's talk about another pocket friendly change. Can you explain how medicare res prescription payment plan will work.

right? So this is a new feature also being introduced next year that I was in the inflation reduction act. This is an option for people who have particularly high costs in the party plan to spread those payments out across the course of the year.

And every plan is required to offer IT. So if is something you can opt into. So once you selected a if you think your costs are going to have that two thousand dollar limit come close, you may want to look into signing up for this. In which case, uh, you know you're basically you're spreading out the costs over the course of the years, kind of give more even this to uh, two year costs.

And I think this medicare plan payment uh option also couples with that two thousand and other cap uh yeah what an important aspect of this, I think is that is going to give people more predictability and stability as we've just think about planning their household finances for there because this is a wild car that had been in the deck in terms of health care costs. And we know that health care costs are one of the most significant expenses that retirees face. So you know, I think these are really solid improvements in terms of making this insurance, uh, are just a much more study, higher quality of insurance. But and also I think adds an element of kind of stability from like a financial planning standpoint than the biggest worth manager.

And three years are likely going to appreciate that. Well, medicare says medicare vantage participants will have plenty of plan options where they live. If someone learns that their plan is being eliminated.

what should they do? yes. So again, the medicare plan find out, which we are talking about a minute ago, is a place where you can shop for nana party drug plans, but also a medicare advantage plans.

So when you log out of the medication site, you can show you what your options are for the year ahead. And in most parts of the country, there are still not literally dozens of advantage of plan offerings that are available. And since most of these plans include prescription drug coverage, there are some changes going on uh in the medical advantage uh end of the pool as well.

So for example, um maybe two thirds of these plans came with premium free drug coverage. There was no additional premium for drug coverage because these managed care plans have a lot ways to offset cost underneath their their financial structures. Well, with this high, with the new two thousand and other cap more of them, we're going to Carry um premiums next year.

So it's just as you shop for these plans, it's always important to take a look at what that coverage looks like. The other thing to look at in medicare advantage is the network of health care providers. You'll have access to uh, this because these are manage care options.

Therefore, you're Operating within an know and more narrow networker providers is one of the huge advantages of traditional metal care is that you can see just about any health care provider in united states and literally any that accepts metal care you can go to when you have in the medicare advantage. You're accepting that limitation of a network people have signed in, signed on to be part of the network of a given plan. And those networks of providers can and do change.

They can change actually anytime during the year, but during the annual. And roman is your time to check and see are the providers that I want to see still in my plan. And um this can be a little difficult to us out.

Sometimes there are issues with accuracy of the list of providers in some of these plans. So A A good thing to do, I think, is to check with your with your doctors, say, hi, i'm inking about signing up for this particular medical advantage plan next year. Do you participate in the, you know, get that confirmation direct from the doctor .

and that's good advice. What if someone wants to make a bigger chains? Like what do they want to switch from medicare vantage to traditional medicare the other way around? What should they know?

Yeah this is a great question. Um the the thing I want to focus on here is somebody who might want to go from medical advantage back or into the traditional medicare program um and I am going to take a step back on this for a second uh when you first sign up for medicare, they ask the best time to sign up for traditional medicare paired with a medicare supplemental plan.

And the reason for that is that the insurance companies to sell metal gate are required to offer you a policy they can do, so called medical underwriting. Me, they can't reject you. Due to a preexisting condition and they have to offer you the best prevAiling Price available in the market at the time.

So it's the best time to get medigap. And medigap is important because without that, there is there are no your out of pocket liabilities uh for party and part b medicare. So this is is really critical to have that supplemental protection.

Now if you're moving from medical advantage into traditional medicare at a later time. So you've been in, say, you selected medicare advantage when you first signed up several years from now down the road, you've decided you're not happy with that. You want to go to the traditional program.

You can do that switch during the annual roman period. The question is whether you'll be able to get a meta gap. So you have a lot of existing conditions. You may not be able to get a policy or the Price may not be attractive. And so IT makes sense if you're considering that step to do some shopping up front for medigap to find out if you able to get one before you make that shift.

And finally, I know gave hints earlier, where can someone go or call to get help when choosing a new medicare plan.

right? Well, a lot of people work with insurance brokers, which can be fine insurance brokers be quite knowledgeable, uh, about medicare but there you know they are typically representing not the entire market but you know whatever plans they signed up to represents. So you don't get the full market view when you talk to brokers.

Uh, an action I like to recommend is the what's called the state health insurance assistance program. They go by ship for short. I and these are uh government sponsored comprehensive and unbiased uh counselling services that can help people with plan selection.

They're available in every state. And in my recent column for morning star, you can find a link to A A national directory so you can find out where the state health insurance in for assistance program is near you. Those that the way i'd like to recommend people go of the, uh need to reach out for someone I want assistance .

and you good news, your article will be in the show knows for everyone who is watching and listening and everyone who is watching listening please share this episode with someone you know who is shopping around for medicare thank you, mark, for explain the changes that are coming to medicare and twenty twenty five.

how is a pleasure that wraps up this week's episode?

Thanks for listening and making this show part of your day. The investing in side team asked that you give our podcast five stars to help others find the work we're producing for you. Thanks to seeing your video producer, jake man percent. And I still see at multimedia ever just a bubble. I I vent, a hampton lee multi media editor, morning star, take care.

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