Medicare changes have health experts warning of rising prices

Health experts are warning seniors that major changes to their Medicare Part D coverage are coming that could lead to big increases in premiums.

Over the next two years, policy updates from the Control Inflation Act are set to change Medicare in a variety of ways. Some changes are positive, such as a $2,000 cap on Part D out-of-pocket payments in 2025, but others could create more challenges than benefits for seniors.

Prices for medicines like insulin would be capped on a monthly basis, so that people who rely on insulin would only have to pay $35 per month. Similarly, recommended vaccines would be available free of charge to people with Medicare prescription drug coverage.

But Joel White, president of the Council on Affordable Care, said the law would also bring significant disadvantages to seniors.

“This legislation is causing a lot of confusion,” White said Thursday during a webinar conducted through Rural Mines and the National Grange.

White was influential in drafting the 2002 Commerce Act, which promoted the health care tax credit and updated some Medicare payment policies.

“One of our considerations when we created Part D was that we didn’t want the government to be involved in these price decisions,” White said. “Plans were negotiating with drug companies, but they were no longer passing on those prices to patients.”

With politicians now setting prices, White warned in October that premiums could rise by 21.5%. Plus, there will be fewer Part D plan options, especially for subsidized plans for lower-income people.

Plans will be cut by 34% in 2024, and seniors will only be able to choose from three premium-free “benchmark” plans.

“The challenge we face is that more and more plans may choose not to participate in Part D,” White said.

Chris Fong, a Medicare expert and CEO of Smile Insurance Group, said seniors should expect changes every year, but this year’s changes could be “more dramatic.”

“We have already heard that some insurance companies have not submitted bids. [choosing not to offer plans under the new rules] To CMS [Centers for Medicare and Medicaid Services] “In their 2025 plans, large insurers such as Humana and Aetna have already notified investors of significant declines in revenue for 2025,” Fong said. Newsweek.

As for stand-alone Part D plans, there are roughly 100 fewer than in 2023, a 50 percent reduction in options compared to the program’s first year.

“There’s less choice and the market is becoming more and more expensive,” White said.

Alex Bean, a financial literacy lecturer at the University of Tennessee at Martin, said rising Medicare premiums have been a reality for some time and “it seems like it’s only going to go up.”

“As costs rise and the population of seniors covered by Medicare grows, that’s going to put a strain on costs and have a ripple effect on the premiums that people pay,” Bean said. Newsweek“These premiums come at the worst possible time for seniors, as inflation has significantly increased the prices of most everyday purchases.”

Some states are offering savings plans to low-income seniors to cushion the blow, but seniors likely won’t be able to avoid rising prices, Bean said.

“The issue, ultimately, isn’t that prices are going up,” Bean said. “That’s expected at this point. The goal should be to make price increases more acceptable and affordable for people who are already struggling financially.”