This year, Medicare plans will see major changes, including higher costs, reduced benefits, and smaller provider networks. Review your Annual Notice of Change to adjust your coverage accordingly.
It’s not uncommon for Medicare plans, such as Medicare Advantage (Part C) and Prescription Drug Plans (Part D), to change their coverage or costs each year. However, due to some recent decisions made by the Centers for Medicare and Medicaid Services (CMS), Medicare plans are set to undergo several large changes in 2025, some of which may make it more difficult to find the right plan and afford certain costs.
You should be receiving a letter from your plan called the Annual Notice of Change (ANOC), which is mailed in September. Based on the information outlined in the ANOC, you can decide whether your plan still meets your needs, or decide to switch to a different plan or return to Original Medicare. And with the pending changes, it’s more important than ever to review your ANOC when it arrives.
Read on to learn more about some of the anticipated changes to Medicare plans and what you can do about it.
6 expected changes to Medicare plans
CMS, the government agency responsible for Medicare, recently made some changes impacting the amount insurance carriers are paid for taking over the costs of insuring each enrolled beneficiary. The resulting higher expenses for carriers means changes to their plans, including coverage, provider networks, and costs. Some of the biggest changes include:
1. Provider and pharmacy networks are getting smaller
One big change Medicare Advantage (MA) plan members may see is that their preferred healthcare providers or pharmacies may no longer be in their plan’s network. The reimbursement cuts by CMS will mean providers of care receive less money for treating patients, so some providers may choose to no longer accept certain MA insurance plans. This means they may become out-of-network for the plan.
You must carefully review the list of in-network providers to ensure your doctors, hospitals, and pharmacies are still in-network. Otherwise, you may pay more for care.
2. Some insurers no longer offering Medicare Advantage plans
In 2024, there were nearly 4,000 Medicare Advantage plans available nationwide, and an average of 43 plans were available to each beneficiary. However, in 2025, several insurers (including some larger, national ones) are exiting the MA market and will no longer offer MA plans. This means there will be fewer MA plans to choose from during the Annual Enrollment Period, and existing customers of these plans will need to either find a new plan or return to Original Medicare.
If that happens to your plan, you should be notified by October 2, 2024. While your coverage will continue through the end of the year, you must choose a new plan for 2025 (or return to Original Medicare and add a Part D drug plan).
Make sure you choose your new plan and enroll during the Medicare Annual Enrollment Period, which runs October 15 through December 7.
3. Costs may be increasing
Some insurance carriers have stated that changes in the MA market make it difficult to provide the same level of coverage they have in the past, and to avoid eliminating coverage and benefits they may instead increase out-of-pocket costs.
Annual premiums and deductibles often increase each year, and experts say MA plan members can expect another increase in 2025. Additionally, some co-pays and co-insurance may increase, so you may need to pay a larger portion of the cost for specific covered services. Plus, some medications you take may cost more for a regular supply (if you get drug coverage through your MA plan).
4. Reduction in covered benefits
On the other hand, some MA plans may instead choose to reduce or eliminate supplemental benefits that may be valued less by enrollees. While widely used benefits will likely be safe, others may no longer be available at all. This may include dental, vision, hearing, fitness programs and gym memberships, and others. For beneficiaries who use these benefits, this may mean they need to switch to another plan that will offer them moving forward.
5. New Part D out-of-pocket spending cap
One of the helpful changes includes a new annual cap on out-of-pocket prescription drug costs. Currently in 2024, you could pay up to $3,300 before qualifying for Medicare’s catastrophic coverage (after which you’d pay nothing for your covered Part D drugs for the rest of the year). In 2025, people with Part D plans won’t have to pay more than $2,000 in out-of-pocket costs. This can help save you thousands of dollars, especially if you’re taking brand-name drugs.
Note this only applies to medications covered by your Part D plan, not any spending on Part B drugs (such as vaccinations or outpatient prescription drugs).
6. Personalized unused benefits notifications
Medicare Advantage plan policy holders enjoy benefits above and beyond Original Medicare. In fact, many MA plans offer up to 23 supplemental benefits for plan members. However, a study run by commonwealthfund.org found that most beneficiaries don’t use these supplemental benefits. This may be why CMS is now requiring all MA Plans to send policyholders a personalized “Mid-Year Enrollee Notification of Unused Supplemental Benefits” for the 2025 plan year. This will list all additional benefits you haven’t used, as well as the estimated out-of-pocket costs for each, instructions for how to access the benefits, and where you can learn more.
This change will help ensure MA plan members know what supplemental benefits they have access to and how to take advantage of them.
How to ensure you have the right Medicare coverage for you in 2025
There are several steps you can take to make sure you have the right Medicare coverage in 2025. First, it’s important to stay informed and keep up with any notices or updates about changes to your plan, including provider network, costs, and benefits. If you’re unsure about any changes, don’t hesitate to ask for help from your plan or a licensed insurance agent.
Be sure to consider which benefits are most valuable to you, whether you’d be willing to change doctors or pharmacies, and what medications you currently take or expect to take in the future. Additionally, compare costs and make sure that premiums, deductibles, co-pays, and co-insurance fit in your budget.
Working with a ClearMatch Medicare licensed insurance agent can help take the confusion and uncertainty out of ensuring your plan still works for you, or if necessary, choosing a new plan. They can help you review your coverage, budget, and options to ensure you get the right plan. Or you can go online to our plan finder and compare plans in your area.
Additional resources
- ClearMatch Medicare: Find a Medicare Plan
- Commonwealthfund.org: Medicare Advantage coverage survey
