MEDICARE CHANGE SPARKS PRICE INCREASE WARNING FROM HEALTH CARE EXPERT
A health care expert is warning seniors that they should expect some major changes to their coverage under Medicare Part D that could result in hefty premium increases.
Over the next two years, Medicare is set to change in various ways because of policy updates in the Inflation Reduction Act. While some changes are positive, like capping out-of-pocket costs at $2,000 for Part D in 2025, other changes are likely to create more challenges than benefits for seniors.
The prices for drugs, like insulin, are being capped monthly so that those relying on insulin would pay only $35 a month. Similarly, recommended vaccines will be available for free as long as you have Medicare prescription drug coverage.
However, Joel White, the president of the Council for Affordable Health Coverage, said the law is sure to bring its fair share of cons for seniors, as well.
"This law is causing a lot of disruption," White said in a webinar Thursday through Rural Minds and National Grange.
White was influential in the writing of the 2002 Trade Act, which prompted health care tax credits and updated several Medicare payment policies.
"One of the things we thought about when we created Part D was, we didn't want the government involved in these pricing decisions," White said. "The plans were negotiating with the drug manufacturers, but they were no longer passing those prices to the patients."
Since politicians now choose the prices, White warned of a 21.5 percent premium increase predicted for October. On top of that, there will be fewer Part D plan options, especially for low-income subsidy plans.
In 2024, there was a 34 percent reduction in plans, and seniors can only choose from three premium free "benchmark" plans.
"The challenge we see is more and more plans may choose to not participate in Part D," White said.
Chris Fong, a Medicare specialist and the CEO of Smile Insurance Group, said seniors should expect change just like every year but the changes for this year could be "more dramatic."
"We have already heard some insurance companies are not providing a bid [choosing not to offer plans under the new rules] to CMS [Centers for Medicare and Medicaid Services] for 2025 plans and larger carriers like Humana and Aetna have already notified their investors of a significant reduction in revenue for 2025," Fong told Newsweek.
When it came to standalone Part D plans, there's almost 100 fewer than in 2023 and a 50 percent loss in choices compared to the first year of the program.
"It's getting to be a much more expensive market with fewer choices," White said.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, said rising Medicare premiums have been a reality for some time, and it appears "the only direction they're headed is up," he said.
"As expenses rise and the population of seniors who qualify for Medicare increases, it's going to put a strain on costs that will reverberate to the premiums people pay," Beene told Newsweek. "For seniors, these premiums couldn't come at a worst time, as inflation has caused the price of most everyday purchases to dramatically rise, as well."
While some states are offering savings plans to low-income seniors to help soften the blow, Beene said seniors will not be able to avoid the price surges.
"The issue isn't ultimately about prices going up," Beene said. "That's expected at this point. The goal should be to make those increases more digestible and easier to pay to those who struggle to keep their financial heads above water already."
2024-07-16T01:39:24Z
