Thanks to the Inflation Reduction Act, big changes are coming to Part D that will bring relief to millions of seniors who are struggling to afford their prescription medications. Some of these changes include the new max out of pocket of $2000 on all Part D Prescription drug plans, elimination of the coverage gap, and a brand new Medicare Prescription Payment Plan.
Under this new plan, if a beneficiary's copay or coinsurance is $600 or more at the register, the member can opt into the program which means they will pay their insurance plan a monthly payment to cover the cost of the drug rather than having to pay such a large amount at the pharmacy register. You will simply opt in, and pay nothing to pick up your medication at the pharmacy and your plan will bill you monthly in addition to your premium.
This all sounds great in theory, but we know that in life, nothing is free and if insurance companies are paying more of the bills upfront as well as everything after the $2000 max is met, we can expect to see an increase in monthly premiums right out of the gate. Rates will be released in September and members will receive their annual notice of changes by the end of September letting them know what their new premium costs will be for 2025. If your plan is coming in high, its crucial to review your options during the annual election period which runs October 15- December 7th.
Lastly, no good deed goes unpunished. While the $2000 cap on Part D costs goes into effect, this causes a new and very serious issue for consumers who have chosen to remain on their employer coverage after age 65. Medicare allows you to delay enrollment into Part D as long as your employers coverage is considered creditable, meaning its just as good or better than Medicares. Typically, these employer plans have met these requirement. Now that Part D plans will have the $2000 max out of pocket, this will most likely be better than most employer plans on the market who combine medical and prescription annual max together and are generally way over $2000 a year. This means if someone chooses to stay on employer coverage after age 65, and the coverage is not credible, when they retire and come off that plan, they will incur a late enrollment penalty which will continue for their lifetime.
To avoid this, consumers should check with their employer before making the decision to remain on their plan, and if the coverage is not credible, they should enroll into part D at age 65, even if they delay Part B and stay on the medical coverage, to avoid a late enrollment penalty.
With change, comes more responsibility to do your homework so that you are not caught off guard with the new rules, good or bad. Reach out to your agent or broker or give us a call to help you navigate this ever changing market.
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