Medicare Open Enrollment Updates for 2025

For those enrolled in Medicare, you will soon have the opportunity to make changes to your health and prescription drug coverage. Medicare’s Fall Open Enrollment begins on October 15 and lasts through December 7, 2024.

During this time, those with Medicare can make changes to their Medicare coverage which will go into effect on January 1, 2025. These changes include switching from traditional Medicare to a Medicare Advantage plan (or vice versa), switching between Medicare Advantage plans, and electing or switching between Medicare Part D prescription drug plans.

Changes Occurring This Year

In 2022, the Inflation Reduction Act was passed putting in place new protections for Medicare beneficiaries. These changes in 2024 and 2025 affect Medicare benefits and potential coverage of your options for 2025 may look very different from before. In fact, in 2025, Medicare will undergo some of the most significant changes in a generation.

Experts say that nothing like this has happened in Medicare since the inception of Medicare Part D in 2006 and that these are uncharted waters. It may take years to stabilize, and 2025 will be a bit of a test to see how well 2026 is going to work. This makes comparing available plans during open enrollment essential.

These are some of the changes:

• You Won’t Spend More Than $2,000 for Drug Copays and Coinsurance Under Part D: In 2025, a new approach will replace previous confusing and frustrating Medicare Part D phases, including the elimination of the “donut hole” and a new limit of $2,000 per year for out-of-pocket Part D drug spending. Here’s how the phases will work. Part D coverage will involve three simple stages:
  • A deductible phase, in which you pay your deductible;
  • An initial coverage phase, when you’ll pay 25% of your covered medication costs until you reach your $2,000 out-of-pocket limit; and
  • The catastrophic phase. In the catastrophic phase, all medication costs are covered. However, this Part D approach does not apply to Part B, which covers medications you receive in the hospital.

In 2025, you can spread out the cost of medications over a period of months rather than paying everything you owe every time you pick prescriptions up from the pharmacy. A new optional payment plan can ease budgeting, particularly for expensive drugs.

Another great change you will see when it comes to drug coverage is that the prices of more Part D drugs have been negotiated. In 2023, Medicare was finally allowed to negotiate prices for 10 of the highest-spending, brand-name Part D drugs without competitors, and it published prices in 2024. CMS will be allowed to negotiate prices for 15 more drugs in 2025, with prices going into effect in 2027.

• Medicare Advantage Plans That Include Part D May Raise Costs or Reduce Coverage: First and foremost, please note that Medicare Advantage plans do not generally provide any advantage to consumers, despite the misleading name of these plans. The only small advantage is that these plans may be less expensive than getting Original Medicare Part A (which is free), part B for a fee, and a Medicare supplement plan, but the combination of Original Medicare plus a Medicare supplement plan will almost always provide significantly better benefits than a Medicare Advantage plan.
  • Medicare Advantage (MA) plans that include prescription drug programs may change or introduce new premiums and copays. They may also increase drug deductibles or reduce benefits.
  • MA plans may introduce significant changes, such as:
    • Increased copayments for specialist visits and hospital stays.
    • Different providers participating in their networks.
    • Higher out-of-pocket maximums for medical care.
  • Some MA plans are raising premiums, adding prior authorization requirements for more medications, and increasing deductibles and copayments before you reach that $2,000 cap.
  • David Lipschutz, co-director of the Center for Medicare Advocacy, warns that to grow profit margins, “Medicare Advantage plans may cut benefits and pull out of unprofitable areas.” He cautions Medicare beneficiaries to be on the lookout for changes to other parts of Medicare Advantage plans, too, including costs and coverage changes for their doctor or other providers.
  • Another concern is that some MA plans may remove costly drugs from their lists of covered prescription medications. Federal rules require that some specific drugs be included in certain categories. However, insurers could still make changes, such as making you jump through more hoops to get coverage.
  • Some MA plans may also get rid of dental coverage or switch to preventive-only coverage, although more comprehensive dental coverage is a top priority for many people who enroll in MA plans.
  • Other changes impact the availability of mental health care, prior authorization use, and unpaid caregiver support for MA recipients with dementia.
  • On a positive note, you also could see new benefits such as special coverage for chronic conditions.

Your month-to-month amount will change depending on the cost of your drugs, the month you filled the prescription at a pharmacy, and any premiums or deductibles due. However, because out-of-pocket expenses are capped at $2,000 annually, you won’t pay more than $166.67 per month ($2,000 divided by 12).

• Part B and Standalone Part D Premiums May Change: Your Part B premium changes every year. In 2025, it will likely increase, although the change hasn’t yet been announced. And as mentioned above, if you get your benefits from a Medicare Advantage company, those premiums may change, as well. Premiums for standalone Part D plans may change, too, if insurers try to offset the $2,000 out-of-pocket maximum. However, the Centers for Medicare and Medicaid Services (CMS) limits any Part D year-over-year premium increase in 2025 to $35.
• You’ll Receive a Mid-Year Notice About Unused Medicare Advantage Benefits: Between June 30 and July 31, 2025, you’ll receive a personalized “Mid-Year Enrollee Notification of Unused Supplemental Benefits.” This letter will list any supplemental benefits such as vision or dental coverage that you haven’t used in the first six months of 2025.
• You’ll Have Better Access to Lower-Cost “Biosimilar” Prescription Drugs: CMS is finalizing changes to increase Part D insurance providers’ ability to make biosimilar drug substitutions for an FDA-approved product. Biosimilar medications are used for many conditions, including diabetes, chronic skin conditions, arthritis, and some cancers. This Medicare change in 2025 could increase your immediate access to lower-cost medications without a wait.
• Medicare Advantage Plans Must Examine the Impact of Prior Authorizations: Almost all Medicare Advantage enrollees must get prior authorization for higher-cost services to manage healthcare usage and lower costs.
  • Denials for coverage have risen in recent years, and although many denials are overturned on appeal, the vast majority (9 out of 10) aren’t appealed.
  • Prior authorization requirements and burdensome processes impose barriers and delay care.
  • In 2025, Medicare Advantage plans must evaluate how prior authorization policies impact certain at-risk populations and display analysis results on their websites. Then, starting in January 2026, insurers must respond to prior authorization requests in seven calendar days (shortened from 14).
  • These changes follow a 2024 change stating that Medicare Advantage plans’ requirements for prior authorization can’t lead to more restrictive coverage than traditional Medicare. They can only confirm a diagnosis or the medical necessity of a requested service.
• Dementia Support Programs: In 2025, a new program called Guiding an Improved Dementia Experience (GUIDE) will offer services to people with dementia and their unpaid caregivers, aiming to keep patients at home longer. Please read today’s Critter Corner for more details on GUIDE.

Action to Take This Year

According to Lipshutz, few beneficiaries actively compare plans and make changes. Most beneficiaries simply let their current plan renew. However, in 2025, it’s critical to pay attention to changes.

“We say this every year, but because of the [Inflation Reduction Act] changes, you need to shop around and ensure your drugs are covered under your plan,” Lipschutz said. “But often, that just doesn’t happen,” Lipschutz said. “People decide based on the premium or brand name, don’t compare plans at all, or go through it once, say they’re done, and stick with what they have. Inertia prevents people from doing the homework they should be doing.”

• For those on a Medicare Advantage plan, carefully look over your letter that arrived last month that outlines changes to your Medicare Advantage plan in 2025. It will include changes to your:
  • In-network provider list;
  • In-network pharmacy list;
  • Drug list; and
  • Cost changes.
• If you want to switch Medicare Advantage plans or return to Original Medicare, you can do so during open enrollment, which runs from Oct. 15 to Dec. 7. (There is a separate Medicare Advantage open enrollment period from Jan. 1 to March 31.) If you do switch from an MA plan back to Original Medicare with a Medicare Supplement, your coverage under Original Medicare will begin January 1 of the following year, and this Medicare supplement provider is allowed to increase your premium based on your medical conditions. You can also make a change between MA plans during the Medicare Advantage Open Enrollment period, which runs from January 1 through March 31. If you make this change, be sure to also sign up for a Medicare Part D stand-alone prescription drug plan (PDP), unless you have creditable drug coverage from another source. If you do not, and you decide to sign up for Part D PDP coverage later on, you may face a penalty for late enrollment.
• Review Drug Coverage and Costs: Ensure any medications you take today are still covered, and determine if the drug’s tier (and your costs) have changed.

Medicare Advantage Plans Aren’t the Right Choice for Everyone.

Before you commit to anything, you should compare plans and find out if your doctors will remain in your network. You may get free dental and a gym pass with your MA plan, but among some of the real issues are denial for expensive care and doctors, hospitals, and rehabilitation facilities that are far away and often subpar.

If you’re unsure about some of the information you received from a Medicare Advantage sales person, you can call 1-800-MEDICARE for more assistance, or work with an experienced and independent health insurance agent who sells both Medicare Advantage plans and Medicare Supplement plans, which are very different. An experienced and independent health insurance agent can explain to you the differences between Original Medicare combined with a Medicare Supplement policy (sometimes called a Medigap policy) and any MA plans that you might be looking at. For more details, please read my many articles on Medicare Advantage.

Plan Ahead with the Help of Experts

At the Farr Law Firm, we work with Retirement & Medicare Together to serve the Medicare needs of our clients. If you are turning 65 and getting ready to enroll in Medicare, please reach out to them or another experienced and independent Medicare insurance agent. In addition, if you or a loved one have not yet done Incapacity Planning, Estate Planning, or Long-Term Care Planning, please contact us:

Fairfax Medicare Planning: 703-691-1888
Fredericksburg Elder Law: 540-479-1435
Rockville, MD Estate Planning: 301-519-8041
Washington, DC Elder Care: 202-587-2797