Medicare Annual Enrollment Enhanced Vs Basic Prescription Coverage

Every year, we hear advertisements claiming changes to Medicare—heck, they’re even saying there are changes in the middle of the year now! A lot of that is misleading. But this year, we’re actually going to see some pretty significant changes to Medicare, thanks in large part to the Inflation Reduction Act. While many of these changes are beneficial and will save people a lot of money, there are also a few that may impact some folks in less favorable ways.

Let’s start with the good stuff. Beginning in 2025, the infamous “donut hole” in Medicare prescription drug plans will be gone! Plus, there will finally be a maximum out-of-pocket limit on Part D prescription drug plans—set at $2,000. For those who are used to reaching Medicare’s donut hole, this should result in significant savings next year. From the examples we’ve seen so far, someone taking a single name-brand medication will likely hit their maximum out-of-pocket by July or August. Once they’ve hit that limit, they won’t pay anything more at the pharmacy for their medications for the rest of the year.

In addition to these changes, we’ll also see two new categories of prescription drug plans: Basic and Enhanced. The new $2,000 maximum out-of-pocket applies to Basic plans. If your plan is classified as Enhanced, you may not actually reach that $2,000 max. If you take name-brand medications, it’s essential to ask your agent if they understand the difference between Basic and Enhanced drug plans to ensure your costs are as controlled as possible.

One byproduct of the Inflation Reduction Act, and the resulting reduction in drug costs for people on Medicare, is that some plans are tightening the belt on their older, less well-performing options. So, what does that mean for you? It means that several plans won’t be renewing next year. This creates a unique opportunity for many people. You’ll have a couple of choices: you can either select another Medicare Advantage plan, like an HMO or PPO, that has your doctors in-network and covers your medications, or you can take advantage of the opportunity to enroll in a Medicare Supplement (Medigap) plan without having to answer health questions.

So, if you’ve been wanting a Plan F or Plan G but couldn’t qualify due to health reasons, and you’re being involuntarily disenrolled from your current Medicare Advantage plan, you may be able to switch to one of these Supplement plans without needing to pass any health screenings.

With all these changes coming, it’s easy to feel overwhelmed, but you don’t have to navigate Medicare alone. Give us a call, and we’ll walk you through everything step-by-step to make sure you’re in the best spot for 2025. We’re here to help—so let’s make sure your Medicare works for you!