Tag Archives: medicare

Key Medicare Changes for 2025: What You Need to Know

11/2024

By Charlotte Disley and Stetson Ponder

As we look ahead to 2025, some important changes are set to shake up Medicare. It’s crucial to understand how these updates might impact your coverage, costs, and access to healthcare. Here’s a straightforward overview of the upcoming changes that all beneficiaries should keep in mind.

Drug Benefits – Part D

$2,000 Out-of-Pocket Cap – One of the biggest changes in 2025 is the introduction of a $2,000 cap on out-of-pocket costs for Part D prescription drugs. Here’s how it breaks down:

  • Deductible Phase: If your plan has a deductible, you’ll need to spend up to $590 out of pocket before coinsurance kicks in.
  • Coinsurance Phase: After you hit that $590 threshold, you’ll pay 25% of the cost for covered drugs until your total out-of-pocket expenses reach $2,000.
  • Catastrophic Phase: Once you hit the $2,000 cap, you won’t have to pay anything else out of pocket for the rest of 2025.

Payment Plans – Starting in 2025, if you’re enrolled in a Medicare drug plan (or a Medicare Advantage plan with drug coverage), you can opt to spread your out-of-pocket drug payments throughout the year through the new Prescription and Copay Payment Schedule Option. There’s no cost to join, but keep in mind this option won’t lower your total drug costs—it just helps manage your payments better!

However, be aware that these changes might lead to some unexpected shifts. For instance, medications could be reclassified to tiers with higher copayments, or some might not be covered at all. It’s important to do your homework—check which prescriptions are included in your plan and get an estimate of their costs for 2025.

Medicare Advantage Plans – Part C

Increased cost of coverage – Medicare Advantage plans might also see higher costs or fewer coverage options due to expected decreases in government funding. Providers will take on more responsibility for prescription drug coverage under the new $2,000 cap, which could lead to changes in available plans.

Scrutiny of prior authorization policies – There is set to be more scrutiny of prior authorization policies by Medicare, which had seen a rise in denials for coverage in recent years. Medicare Advantage plans will need to assess how their prior authorization policies affect different groups and will be required to make this information publicly available on their websites. Responses to prior authorization requests must be given within seven days, down from the previous 14-day requirement.

Unused Benefits – Starting in July 2025, enrollees will receive notifications about any unused benefits in their plans. With an average of 23 supplemental benefits—like hearing aids, fitness programs, and dental services—available in many plans, it’s essential for participants to be aware of what’s offered. Last year, about 30% of Medicare Advantage plans had unused benefits, underscoring the importance of being proactive in managing your options.

Expanding Support in Other Areas

Enhanced Mental Health Services – The availability of licensed mental health professionals who are covered by Medicare is set to expand. This includes Licensed Mental Health Counselors (LMHCs) and Licensed Marriage and Family Therapists (LMFTs), and addiction counselors. This is a significant step toward improving access to mental health care for Medicare beneficiaries.

Family Caregiver Support – Earlier this year, a new program, Guiding an Improved Dementia Experience (GUIDE), was implemented to support patients with Dementia and their unpaid caregivers. GUIDE offers services including a 24/7 support line, a care navigator to help find medical and community-based services, caregiver training, and up to $2,500 per year for at-home, overnight, or adult day care respite services. Typically, patients and their caregivers won’t face copayments. In 2025, the GUIDE program is set to quadruple in size, serving far more of the population experiencing these challenges.

Stay Informed and Prepared

With these major changes on the horizon for Medicare in 2025, it’s vital for beneficiaries to review their prescriptions and healthcare needs to ensure continued coverage. Staying informed and proactive will empower you to navigate these updates and maximize your Medicare benefits.

Reach Out

If you have any specific questions about your situation or enrollment, please reach out to the Cahaba Team directly and we are happy to provide additional resources for Medicare related inquiries.

Sources

  1. https://www.aarp.org/health/medicare-insurance/info-2024/medicare-changes-coming-in-2025.html
  2. https://www.investopedia.com/major-medicare-changes-for-2025-8713206
  3. https://www.panfoundation.org/everything-you-need-to-know-about-medicare-reforms/
  4. https://www.nerdwallet.com/article/insurance/medicare/medicare-changing-2025
  5. https://www.usatoday.com/story/news/health/2024/10/15/medicare-enrollment-changes-for-2025/75671849007/
  6. https://www.wsj.com/health/healthcare/medicare-plans-are-making-big-changes-for-2025-heres-how-to-navigate-them-5c81fd05

Charlotte Disley and Stetson Ponder are Financial Planning Analysts in the Atlanta office of Cahaba Wealth Management, www.cahabawealth.com.

Cahaba Wealth Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Cahaba Wealth Management is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Content should not be construed as personalized investment advice. The opinions in this materials are for general information, and not intended to provide specific investment advice or recommendations for an individual. Content should not be regarded as a complete analysis of the subjects discussed. To determine which investment(s) may be appropriate for you, consult your financial advisor.

Why Are My Medicare Premiums So High?

5/2023

By Charlotte Disley

The world of Medicare can often times bring on feelings of confusion, and not to mention, high premiums! It is important that those enrolling in Medicare Part B (Medical Insurance) and Part D (Drug Coverage) have a solid understanding of how their premiums are being calculated.  

Income-Related Monthly Adjustment Amount (“IRMAA”) is a surcharge added on top of original Part B and Part D premiums, and is based on different income thresholds which are determined by Modified Adjustment Gross Income (MAGI) from two years prior. For example, premiums in 2023 would be assessed by MAGI taken from a 2021 tax return. 2023 IRMAA premiums for Part B is shown in the tables below. Note that the monthly premium amounts listed are per person.

Source: https://www.cms.gov/newsroom/fact-sheets/2023-medicare-parts-b-premiums-and-deductibles-2023-medicare-part-d-income-related-monthly

Certain individuals may be eligible to appeal IRMAA if they have experienced a life changing event that reduced household income and moved them into a threshold with a lower premium. If income is significantly different in the current year than two years prior, then there are a few steps to take to appeal the premium amount. The SSA will not automatically adjust your premium amount, so it is important to pay attention to your income each year and ensure you are placed into the accurate IRMAA bracket.

Let’s take a look at a hypothetical, yet realistic, example of how this might play out for a couple on Medicare in 2023 looking solely at their Part B premiums.

John and Jane Doe are both age 70 and are married filing jointly. Jane retired at age 50 from company X, but her only source of retirement income is in the form of an IRA. John spent his life working at company Y where they offered a 401(k), a qualified pension (monthly annuity payment), and a non-qualified pension paid in annual installments over a 10 year-period. John retired at the end of the year in which he turned 58. They are not yet at the age of needing to take RMDs from their retirement accounts. John had been consulting since his retirement, bringing in annual earnings of $200k, but stopped at the end of 2021. On top of this, his last non-qualified pension payment of $150k paid at the end of 2021. As a couple, they have consistent streams of taxable income in the form of his qualified pension ($75k/year) and the taxable portion of their social security payments ($80k/year).

Given this information and assuming they have no other taxable income streams, in 2021, John and Jane had a MAGI of $505k. Looking back at the premium threshold, this would set them comfortably into the bracket with a $527.50 monthly premium each for 2023. Comparatively, today (assuming no additional income other than qualified pension and social security), the reality of their MAGI is $155k. This places the Doe’s into the lowest IRMAA bracket with a monthly premium of $164.90 each. This produces a whopping ~$8,700 of savings on Medicare Part B premiums if they take the time and effort to appeal IRMAA.

So, how do you actually appeal IRMAA?

You will need to fill out the following form (https://www.ssa.gov/forms/ssa-44.pdf) and provide supporting documents that show a more accurate depiction of current income. This is where Cahaba comes in to assist our clients with the process! Knowing our clients’ financial situations inside and out allows us to help prepare supporting documents, as well as cover letters detailing the request for adjustment. This takes much of the burden for preparation off of our clients, and usually results in a successful appeal!

Charlotte Disley is a financial planning analyst in the Atlanta office of Cahaba Wealth Management, www.cahabawealth.com.

Cahaba Wealth Management is registered as an investment adviser with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Cahaba Wealth Management is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation. Content should not be construed as personalized investment advice. The opinions in this materials are for general information, and not intended to provide specific investment advice or recommendations for an individual. Content should not be regarded as a complete analysis of the subjects discussed. To determine which investment(s) may be appropriate for you, consult your financial advisor.