By Ben Young
Astute Wealth Management
October 22, 2024

Important Updates for Medicare Enrollees

Medicare enrollees need to be aware of the major beneficial changes to the Part D Prescription program put into place for 2025.

Sandra Destefano, an independent Licensed Insurance Advisor certified in the sale of Medicare products, provided information about the important changes during both presentations co-sponsored by Astute Wealth Management and an Astute Wealth & Health Podcast.

Key Changes During Open Enrollment

The most significant changes being offered during Medicare’s annual open enrollment period, which started October 15 and ends December 7, include:

1. Elimination of the $6,000 Gap: The gap between where regularly covered prescription medication costs ended in the past and catastrophic coverage started will be eliminated.
2. Capping the True Out of Pocket Limit: The True Out of Pocket Limit, or “TrOOP,” will be capped at a total of $2,000.

The Impact of Eliminating the Gap

The most monumental difference, according to Sandra, is doing away with the gap, also known as the “donut hole.” Previous Part D programs covered regular prescriptions up to a $2,000 limit and then catastrophic approved medications beginning at $8,000. There will be no gap in 2025 plans.

Medicare Part D will have just two coverage stages instead of three, explained Sandra.

Coverage Stages Explained

In the first or “initial” stage, once the $2,000 out-of-pocket for Medicare Part D approved prescriptions is reached, subscribers will pay $0 for Medicare-covered prescriptions for the balance of the plan year. The component amounts contributing to the $2,000 are the following:

• 100% of the drug costs paid until meeting the deductible
• The ensuing copays and deductibles, which can’t exceed $590
• Coinsurance or manufacturer contributions, if any

Note: Premium payments, pharmacy dispensing fees, medications not covered by Part D, as well as payments by employers or union health plans, do not count towards the $2,000 initial stage limitation.

However, that is where out-of-pocket expenses will end for Medicare Part D participants, regardless of the “catastrophic” need for approved medications. Subscribers will pay no more than $2,000 in 2025 for prescription drugs covered by Medicare Part D. This specifically includes costly prescription drugs used in the treatment of cancer, chronic illnesses, and others.

Additional Important Notes

Following are several other items to note:

• Medicare has negotiated with providers to cap the cost of insulin at $35 for seniors with diabetes. In the past, the cost has ranged as high as $400 a month.
• As part of Medicare Part B, approved providers offer free vaccines used to treat the flu, COVID-19, shingles, and HIV.
• All Medicare participants should review their Medicare handbooks as well as the communications from their third-party insurance and healthcare providers to note changes in coverage as well as the projected 2025 costs. Most plans make year-to-year changes, and some even leave the market.

Contact Information

Ben Young is the founder and owner of Astute Wealth Management. He can be reached at (530) 677-6001 or by emailing him at ben@astutewealth.com.

Sandra Destefano helps clients needing assistance navigating the often difficult process of selecting the best possible assortment of Medicare products. She is skilled in structuring programs that include Medicare Supplements, Medicare Advantage, and Prescription Drug Programs. Sandra can be reached at (916) 699-6717 or by email at sandradestafano@bufferinsurance.com.