Make the Most of Medicare 2025

Changes to Medicare are making it more important than ever to review coverage options and select the right policy for you during Medicare’s Annual Enrollment period October 15 – December 7.?

As a Private Wealth Advisor, I am continuously iterating clients’ financial plans.?We fine tune saving, spending, investment, and insurance strategies as life changes, goals are reprioritized, and legislation is updated.?One law that I have been monitoring as I advise retired clients is the Inflation Reduction Act of 2022.?Since its passage, it has introduced changes to Medicare’s Part D Drug Coverage plans.?

In 2025, for the first time in Medicare’s history, the Inflation Reduction Act will impose a limit on how much Medicare beneficiaries pay for prescriptions out-of-pocket each year; it will be capped at $2,000.?As a result of this and other industry trends, significant changes in Part D Drug Plans are expected for 2025.????

The following are tips that I am encouraging my clients to keep in mind at this critical time.?Wish your private wealth advisor was highlighting information like this to you??Let’s talk.

Understand How Medicare Works

Medicare is a national health insurance program for people who are 65 years and older.?Individuals enroll in Medicare through the Social Security Administration (SSA).??

While factors like your age, work status, and Social Security benefits impact when you sign up for Medicare, there are two steps you complete to set up your Medicare coverage:

Step 1: Sign up for Part A – Hospital Insurance and Part B – Medical Insurance

Step 2: Decide how you get your Medicare health coverage; you have 2 choices:

1. Original Medicare – Federally run by the Centers for Medicare and Medicaid Services (CMS) under Health and Human Services
2. Medicare Advantage (also known as “Part C” or “MA” Plans) – Privately run by individual insurance companies

Consider the following when completing Step 2: Deciding your Medicare health coverage:

• Medicare costs you pay depend on the type of coverage you select
• Prescription?drug coverage, also known as “Medicare Part D” is accessed differently across the two options; you typically can add on a Medicare Part D Drug Plan to Original Medicare whereas Part D Drug Plans are included in most Medicare Advantage
• Supplemental coverage also known as “Medigap” is available to people who choose Original Medicare to help cover additional expenses.?You have a one-time six-month period to enroll in this if you are interested.?If you enroll in a Medigap policy, the insurance company can’t deny you coverage due to pre-existing health conditions.?Once you buy it, you keep it as long as you pay your premiums; all policies are automatically renewed every year, even if you have health problems.?

Realize How Medicare is Changing

According to the health policy research organization KFF, about 54% of all Medicare enrollees are in Advantage Plans.?Historically, the plans’ low premiums, efficient administration (e.g.: underwriting, claims processing) and bundling of benefits and drug coverage have attracted many Medicare participants.??

As we all know, health care needs are growing, costs are rising, and there are ongoing efforts like the Inflation Reduction Act of 2022 to promote cost transparency and relief for Medicare enrollees.?Simply put, it has become expensive for insurance companies to offer Part C plans.?

As a result, insurance companies are reducing Part C benefits, increasing premiums, and even stopping offering plans to some markets.?CVS is preparing to make significant changes to its 2025 plans, potentially impacting 10% of its members or another 420,000 individuals.?Humana is leaving 13 markets, requiring more than 500,000 Medicare participants to find new plans.?

What does this mean for you??It is imperative that you evaluate the 2025 Medicare health coverage options considering your latest health needs and ensure that you have the right policy for you for the year ahead.?

Be Your Own Health Care Advocate

Monitor the evolving Medicare landscape with these resources:

• Annual Notice of Change – if you currently are enrolled in a Medicare plan, you should have received a summary of changes to the plan that will be effective in January.?Carefully review this information and determine whether the plan will meet your needs in 2025.???
• Medicare & You 2025?is the official guide to Medicare.?It provides a variety of information clearly and succinctly and highlights what’s new and important, effective in 2025.??
• Understanding Medicare Advantage Plans?is the official booklet detailing how Medicare Advantage Plans differ from Original Medicare, how Part C Plans work, and how you can join one
• Medicare Plan Finder?online tool to find and compare Part D Drug Plans

Additionally, vetted volunteers are available through?State Health Insurance Assistance Program (SHIP)?to help you make sense of Medicare and what option may be best for you.?If you consider engaging a professional to advise you on your Medicare choices, confirm first the individual’s experience, professional training/certifications, and how she is compensated for advising you.?

When it comes to your health and your wealth, clarity matters.?When you understand your options and make informed decisions, you experience confidence as you navigate life’s inevitable uncertainties.?Use this dynamic Medicare market as an opportunity to re-evaluate your preferred medical providers, medications, and health care needs and reconfirm the plans that will best meet them in the year ahead.?And if you want to work with an experienced independent private wealth advisor as you contemplate new financial decisions over time, know that I am here.

Caroline Wetzel is a CERTIFIED FINANCIAL PLANNER TM (CFP?) and Vice President, Private Wealth Advisor with Procyon Advisors LLC. Procyon Advisors, LLC is a registered investment advisor with the U.S. Securities and Exchange Commission (“SEC”).?This article is provided for informational purposes and may also include opinions and forward-looking statements which may not come to pass. Information is at a point in time and subject to change. Procyon Advisors, LLC does not provide tax or legal advice. https://www.procyonpartners.net/team/caroline-wetzel/