If you are enrolled in a Medicare Advantage plan or a stand-alone Prescription Drug Plan, you can expect to receive one or two Annual Notice of Change (ANOC) letters via mail or email in September regarding your coverage and costs for 2025. While it may be easy to dismiss these letters as unimportant, it is crucial that you pay attention to them this year.
So often, a person who is quite happy with their plan and doesn’t bother to look at their Annual Notice of Change, will get a nasty surprise in January when the plan’s new costs and coverage kick in. Don’t be THAT person who is unaware. The Annual Notice of Change from your Medicare Part D Prescription Drug Plan or a private insurer’s Medicare Advantage plan lays out how much your premiums, deductibles, and co-pays will differ in the year ahead and whether your plan may even be dropped altogether.
The ANOC from your Part D plan also says whether your prescriptions will be covered and, if so, how much you’ll pay, and the Medicare Advantage Notice of Change will tell you if your doctors and hospitals will remain in the plan’s network.
This year, more than ever, there is a chance that something is changing with your plan.
As we have noted in last month’s newsletter, the Part D Prescription Drug Plans are undergoing a major change, and with every change for the better, you can bet that something else will be worse. Have you heard? There is a new $2,000 cap on out-of-pocket costs for prescriptions covered by a Part D plan, implemented by the current administration. Sounds good on the surface, right? But wait... Since Part D health insurers (ex: SCAN, UnitedHealthcare, Humana, Blue Shield, etc.) will be on the hook for more prescription costs due to the cap, they’ll be looking for ways to recoup these losses.
Along with anticipated costs of premiums increasing dramatically, and many Part D plans having the maximum deductible allowed by Medicare of $590 in 2025, one of the biggest anticipated changes will be to the drug formularies. It is expected some Part D plans no longer covering certain medications you take, or raising the prices substantially of drugs it continues to cover.
Medicare Advantage plans - some facing profit squeezes currently - often include Part D coverage, so they may respond to the $2,000 cap by trimming or eliminating benefits to keep their popular $0 premiums intact, experts expect. As a result, your Medicare Advantage benefits that original Medicare can’t offer, such as dental, vision hearing, and gym memberships, could be less attractive than in 2024, or possibly gone entirely.
In a recent survey, only 36% of Medicare beneficiaries said their Annual Notice of Change letter is “readily understandable.” You should figure on spending about 30 minutes closely reading your Annual Notice of Change to see exactly what will be different in 2025 and whether you’ll want to switch plans or coverage next year as a result. During open enrollment, you can switch from your current Part D plan to another, from your Medicare Advantage plan to another, from Medicare Advantage to original Medicare as well as from original Medicare to a Medicare Advantage plan. But don’t feel compelled to switch plans just because your Annual Notice of Change says your premium will go up a little or a benefit will be trimmed slightly.
If there is a modest benefit decrease or premium increase, but overall you are satisfied with what the carrier is providing, you do not necessarily need to make a change. After reading your Annual Notice of Change, you may want to get help deciding.
If you are a resident of California and need help understanding the changes to your existing plan for 2025, please reach out to me for personalized help at no cost to you.
Stew Duncan - (760) 473-0071
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