D. Kenton Henry Editor, agent, broker 30 SEPTEMBER 2025
Medicare 2026: Welcome clients and prospective clients! Before reading this (if you have not already), you should go to your mail box and retrieve your 2026 Annual Notice of Change from Medicare. You were due to receive it no later than today per Center For Medicare Rules and Regulations. If will give you a good idea if you need to re-shop your Medicare Advantage or Part D Drug plan for the coming calendar year. If not, the following changes may.
10 changes to review before the Annual Election period, often referred to as the Open Enrollment (Oct 15–Dec 7)
If you’re on Medicare, 2026 brings important updates—especially to prescription drug coverage. The Part D out-of-pocket cap rises to $2,100, the standard deductible becomes $615, and Medicare’s first negotiated drug prices start on January 1, 2026. Medicare Advantage also gets new guardrails around prior authorization and appeals, and some supplemental “perks” are being narrowed. Check your Annual Notice of Change (ANOC) (it should arrive by Sept 30) and compare your plan options—small differences can mean big savings. If you’d like help, I’ll review your medications, doctors, and benefits to make sure you’re in the right fit for January 1.
Here is an itemized list of the 10 Key Changes:
Medicare changes your 2026 plan review should cover
1) Part D’s annual out-of-pocket cap rises to $2,100. Once a member’s 2026 Part D out-of-pocket spending reaches $2,100, they’ll pay $0 for covered Part D drugs for the rest of the calendar year.
2) The standard Part D deductible increases to $615. Plans can’t set a deductible higher than $615 in 2026 under the redesigned Part D rules.
3) Drug price negotiations start showing up at the counter. Medicare’s first set of negotiated Maximum Fair Prices (MFPs) for 10 widely used Part D drugs take effect January 1, 2026. Members should review their ANOC and plan formularies to determine how these prices impact their medications.
4) Insulin and adult vaccines: protections continue. Part D insulin remains capped and no-deductible; starting in 2026, the cap is the lesser of $35, 25% of the MFP, or 25% of the negotiated price. ACIP-recommended adult vaccines remain $0 under Part D.
5) “Pay-over-time” for prescriptions auto-renews. The Medicare Prescription Payment Plan (monthly billing instead of paying large amounts at the pharmacy) auto-renews in 2026 unless the member opts out. It smooths payments but doesn’t lower total costs—good to remind clients who tried it in 2025.
6) Medicare Advantage prior-auth and appeals guardrails tighten. For 2026, CMS says MA plans must honor previously approved inpatient admissions (can only reopen for obvious error or fraud), and CMS closes appeals loopholes so members and providers receive required notices and can appeal adverse coverage decisions. Expect fewer mid-stay reversals. Centers for Medicare & Medicaid Services
7) Limits on certain “extra perks” in MA (SSBCI) take effect. CMS codified non-allowable Special Supplemental Benefits for the Chronically Ill—examples include non-healthy food, alcohol, tobacco, and life insurance. Some plans may rebalance extras as a result.
8) Star Ratings update: new/returning measures. 2026 Stars add or reintroduce measures like Kidney Health Evaluation for Patients with Diabetes plus Improving/Maintaining Physical and Mental Health (weight = 1). Tougher cut points in 2026 may shift plan bonuses and benefit richness—worth watching locally.
9) Part D benefit design shifts behind the scenes. Liability shares change across phases (plans, manufacturers, CMS), and there’s a new subsidy for selected (negotiated) drugs. Members may see formulary/tier adjustments—another reason to compare plans.
10) ANOC timing: what to tell clients. Remind everyone: Annual Notice of Change (ANOC) letters arrive by September 30 each year; if they didn’t see one, call the plan. Open Enrollment runs Oct 15 – Dec 7 for Jan 1 effective dates.
Check your Annual Notice of Change (ANOC) (it should arrive by Sept 30) and compare your plan options—small differences can mean big savings. If you’d like help, I’ll review your medications, doctors, and benefits to make sure you’re in the right fit for January 1.
Other Developments
Some Medicare Advantage supplemental benefits (i.e. nutrition support, OTC medicine) may be reduced in favor of core services.
In six states, prior authorizations for certain Original Medicare services will be tested.
Part B and Part D premiums and deductibles are both set to increase—Part B premium up ~11.6%, and Part D premium by about 6%.
Who Am I?
In addition to being the editor of this blog I have has been helping individuals and families navigate the health and Medicare insurance landscape since 1986. With nearly four decades of experience, he specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D prescription drug plans.
As an independent broker, I am appointed with virtually every competitive, A-rated Medicare insurance company in Texas, Indiana, Ohio, and Michigan. This broad access allows him to recommend the plan that truly best fits each client’s needs.
Above all, I work for my clients—not the insurance companies. You will never pay more by enrolling through me than you would if you purchased an insurance product directly from the carrier. My mission is to provide clear guidance, personalized recommendations, and ongoing support to ensure my clients get the coverage and peace of mind they deserve.
If you have any questions about 2026 Medicare Part D prescription drug plans, Medicare Advantage, or Medicare Supplement (Medi-Gap) policies, please give me a call.
Average premiums, benefits and plan choices for Medicare Advantage and the Medicare Part D prescription drug program should remain relatively stable next year, CMS said in a Sept. 26 news release. But MA enrollment is projected to decrease 900,000 in 2026.
Despite a slight dip in available MA plans nationally, over 99% of Medicare beneficiaries will still be able to access an MA plan.
The agency estimates the premiums for MA plans to drop from $16.40 to $14.00. On average, the total premium for standalone Part D is estimated to fall $3.81. CMS’ July forecast predicted elevated Medicare Part D base premium increases in the neighborhood of 6%.
By D. Kenton Henry Editor, Agent, Broker HealthandMedicareInsurance.com 11 September 2024
Welcome, fellow boomers and others blessed to have lived long enough to find yourself here. I believe you recognize that the information in my blog posts can contribute to this leg of our journey being the longest and most rewarding. I’m right here with you and doing my best to make it so for all of us. Coming changes in 2025 Medicare plans are significant, so please read this and feel free to take notes. They could impact you and probably will.
We will begin with what your Medicare Part B premium to Medicare for Out-Patient Care will go to: For those earning less than $105,000 your premium will go to $185.00 (up from $174.70) For those in the highest income bracket, earning greater than $500,000 your premium will go to $628.90 (from $594.00) For every income block in between, couples filing jointly, and what Part D premiums to Medicare will go to, please click on this link and scroll down: https://www.irmaacertifiedplanner.com/2025-irmaa-brackets/
An Annual Notice of Change (AOC) from your Medicare Part D prescription drug plan or a private insurer’s Medicare Advantage plan is due you. It will arrive in the United States mail and, per Medicare rules, by September 30th. So, like the pretty woman in the image above, open it and read it. It outlines how much your premiums, deductibles, and co-pays will differ in the coming year. Will your drugs be covered, and will your current drug plan even be available? We don’t yet know. Mutual of Omaha notified agents and brokers that it is withdrawing altogether from the Part Drug plan market beginning January 1. If you are currently with them or have any other plan that is exiting the marketplace, follow the instructions in the next paragraph.
According to eHealth, a mere 36% of those surveyed claim the AOC to be “readily understandable.” The author of the attached article recommends you spend at least 30 minutes reviewing it. However, if you finish this article, you can cut that time considerably. If you have finished all and still feel you are among the remaining (up to) 64%—please call me @ 281-367-6565.
This article is a follow-up to my last blog post on September 3rd. “MAJOR CHANGES IN MEDICARE PART D DRUG PLANS ARE COMING OUR WAY (what we know. and one thing we don’t know).” To read it, please click on this link. (if necessary, copy and paste it in your browser’s URLbox and hit enter):
Well, now we know more of the potential compromises mentioned or alluded to in that article. All of these are covered in detail in Feature Article 1 below.
The changes addressed here are largely because of the new $2,000 per year limit on Medicare Part D drug costs in 2025 (versus $8,000, plus 5% thereafter, in 2024). That leaves Medicare Part D insurance companies looking for ways to compensate for the additional costs shifting from you to them. Come January, you will meet a new deductible of up to $590 (from $545) for applicable drugs. Typically, your plan will apply this to brand-name drugs and not Tier 1 or Tier 2 generics.
Beyond that, the Gap, commonly referred to as the “donut hole” (in which you were previously responsible for 25% of your drug costs), has been eliminated entirely. You will have entered the “Initial Coverage” phase in which your elected drug plan will pay 65% of your applicable drug costs, and you will pay 25%. The Manufacturer (pharmaceutical company) will discount the remaining 10%. When you hit your maximum Out-of-Pocket (OOP) threshold of $2,000, you enter “Catastrophic Coverage”. At that point, your plan will pay 60%. Reinsurance (CMS, the Center for Medicare Services, i.e., the government) will pay 20%, and the Manufacturer will pay the remaining 20%. You will pay $0.
This, of course, sounds very well and good! And for those utilizing large quantities of drugs, or expensive drugs, this will indeed be of great benefit. But in what ways may the drug plans “compensate” for the additional costs they will bear? Much of such was referenced or alluded to above. However, please permit me to drill down on potential measures drug plans may take to offset their increased share of your drug cost. *(I am a Medicare Insurance product broker and not a C.P.A. As such, I will not address the impact on the taxpayer of their increased share of Medicare drug costs in this forum. wink. wink 😉
The drill down:
In addition to the higher deductible, higher premiums may be in store. But it could have been a lot worse. CMS did health insurance companies a favor with a “premium-stabilization” plan. In 2025, they will give them a subsidy in exchange for not “slapping members with exorbitant premium hikes. So, “what might have been a 40%, 50%, or higher premium increase may only be as high as 25%. Either way, it will be a sticker shock when some see how their premiums changed.” *(a paraphrase a quote in Feature Article 1)
The Kaiser Family Foundation says the average cost of a stand-alone Part D drug plan is $43. I have seen previews of premiums which will be $0, but others, have risen. In addition to your premium, co-pays for your drugs could go substantially higher. If your drug plan is obligated to charge you less for (or cover more of) a particular drug, are they simply going to charge you more for others?
And what about “Value Added Benefits” (VAB) available in some Medicare Advantage Plans? These include vision, hearing, and dental services. Other examples include acupuncture, bathroom safety devices, and wigs for hair loss. And what about your gym membership? Embedded dental insurance has been dramatically cut back or removed completely.
VAB are not covered by Original Medicare. Medicare Advantage has been able (often along with a $0 premium) to offer these things as an additional incentive to encourage enrollment in their plans. However, because you left Original Medicare and “assigned” the administration of your benefits and claims to the Advantage company when you enrolled, your plan can choose to provide these ancillary benefits that Original Medicare does not. Or they can choose to cover them no longer. This discretion is on their part because the provision of VAB benefits is not codified in law or per CMS regulation. Resultingly, they are not guaranteed. They are optional benefits that the plans have the right to withdraw at any time. I hope you can continue to “workout” at the gym, at your plan’s expense, in 2025 and beyond. But be prepared to purchase a home gym kit if you learn your membership is downgraded or your Advantage plan disappears entirely.
With no obligation, please feel free to contact me for clarification of these relevant issues and additional guidance in navigating the Medicare system and the changes referred to here. I’m in Medicare with you. I am a “Boomer” who has spent the better part of his life in the medical insurance market. For years, I have assisted individuals, families, and businesses in identifying and enrolling in health insurance plans that came as close as I could get them to fully meeting their medical insurance wants and needs.
To sum things up, I work for my clients. I work for you. Not the insurance company. I study, take their tests, and “certify” to represent their products each calendar year. I just completed certifying with approximately 14 companies in preparation for marketing their products in 2025. They do not pay to renew my licenses or my Errors and Omissions insurance, nor do they cover my office insurance and expenses. Neither they, nor anyone else, pay me wages or a salary. And that is great! I knew and understood those terms when I went out on my own. And that is precisely why I did it. I did not want to be beholden to the insurance company.
After becoming independent, the list of companies I was contracted with grew to over 40 during the 1990s. That number has changed as many of those companies went the way of the steam engine with “Obamacare” and all the red tape and regulations that come with it and remaining in the industry. But I persist. I remain positioned to provide you with virtually every available Medicare and health insurance product in your region.
In conclusion:
If you’re reading this, chances are you remember Jim Rockford (a private detective, portrayed by the actor the late James Garner) in his TV show, The Rockford Files (you can hear the opening music now, can’t you?). In the prelude to each episode, you see his cassette recording answering machine and hear the message, “This is Jim Rockford. At the tone, leave a message …”.
Should you get mine, please do the same. Or you may simply text me.
FORTUNE Richard Eisenberg Updated Mon, Aug 26, 2024
Why this year’s Medicare Annual Notice of Change will be vital reading for beneficiaries
In this article:
If you’re on Medicare, you’ll be getting one or two Annual Notice of Change letters in your mail or email this September about your 2025 coverage and costs. You may be tempted to ignore what looks like junk, as nearly a third of recipients do, according to an eHealth survey.
Don’t.
“So often, a person who is quite happy with their plan and doesn’t bother to look at their Annual Notice of Change then gets a nasty surprise in January” when the plan’s new costs and coverage kick in, says Danielle Roberts, author of 10 Costly Medicare Mistakes You Can’t Afford to Make and founding partner of Boomer Benefits, which sells Medicare policies.
What is an Annual Notice of Change?
An Annual Notice of Change from your Medicare Part D prescription drug plan or a private insurer’s Medicare Advantage plan lays out how much your premiums, deductibles, and co-pays will differ in the year ahead and whether the plan will even be offered. (Medigap plans don’t send these notices because they don’t change much year to year.)
An Annual Notice of Change from your Part D plan also says whether your prescriptions will be covered and, if so, how much you’ll pay. A Medicare Advantage Notice of Change will tell you if your doctors and hospitals will remain in the plan’s network.
While this information is always essential to make smart choices during Medicare’s eight-week open enrollment period (Oct. 15 – Dec. 7), experts say reading your Annual Notice of Change is especially important in 2024.
“There is an excellent chance that something is changing on your plan,” says Roberts. “This year, more than ever, we can expect big changes in the plans.”
Surprising effect of the $2,000 prescription drug cap
That’s largely due to a major Medicare change coming in 2025: the new $2,000 cap on out-of-pocket costs for prescriptions covered by a Part D plan.
Since Part D health insurers will be on the hook for more prescription costs due to the cap, they’ll be looking for ways to compensate.
That could mean higher premiums (currently $43 a month for stand-alone plans, on average, according to KFF), deductibles, and co-pays—possibly substantially higher than in 2024.
“I have been very, very concerned about what the $2,000 cap was going to do to Part D premiums,” says Roberts.
The prescription drug change in 2025 could also lead to your Part D plan no longer covering certain medications you take or raising prices of ones it will.
Medicare Advantage plans—some facing profit squeezes currently—often include Part D coverage, so they may respond to the $2,000 cap by trimming or eliminating benefits to keep their popular $0 premiums intact, experts expect.
As a result, your Medicare Advantage benefits that original Medicare can’t offer—such as dental, vision, hearing, and gym memberships—could be less attractive than in 2024, or possibly gone entirely.
“It really will be important to understand what’s changing in the coming year in my current plan and does the plan still fit?” says eHealth CEO Fran Soistman. “Does it still provide the value that it did when I elected to go in it in the first place?”
Reading and understanding the Notice of Change
Your Annual Notice of Change will tell you—if you can understand it.
Only 36% of Medicare beneficiaries surveyed by eHealth said their Annual Notice of Change letter is “readily understandable.”
Figure on spending about 30 minutes closely reading your Annual Notice of Change to see exactly what will be different in 2025 and whether you’ll want to switch plans or coverage next year as a result.
During open enrollment, you can switch from your current Part D plan to another, from your Medicare Advantage plan to another, from Medicare Advantage to original Medicare as well as from original Medicare to a Medicare Advantage plan.
But don’t feel compelled to switch plans just because your Annual Notice of Change says your premium will go up a little or a benefit will be trimmed slightly.
“If there’s a modest benefit decrease or premium increase, but they’re satisfied with what the carrier is providing, people shouldn’t make a change,” Soistman says.
However, he added, if a medication you take will no longer be covered or your physician or hospital won’t be in network, that’s an important change that may persuade you to switch coverage.
The Medicare Plan Finder on Medicare’s site will let you compare Part D and Medicare Advantage plans for 2025.
And, as Philip Moeller writes in the forthcoming revised edition of his book, Get What’s Yours for Medicare, if your Medicare Advantage plan won’t include your favorite doctor or hospital in its network in the year ahead, it’s legally obligated to work with you to identify other physicians or hospitals in its network that you’d like.
A new program to help avoid big premium hikes
To help prevent drastic Part D premium increases, the government’s Centers for Medicare and Medicaid Services recently threw a bone to health insurers with a premium-stabilization plan.
Medicare will provide a special subsidy to those insurers for 2025 in exchange for avoiding slapping members with exorbitant premium hikes.
“It should take what might have been a 40%, 50%, or higher premium increase down to probably 25%,” says Soistman. “It’s still going to be a bit of sticker shock when some people see how their premiums changed.”
Roberts says, “I’m still somewhat concerned about premiums, but I feel a little better after the stabilization program announcement.”
Getting help if your Medicare plan will change
After reading your Annual Notice of Change, you may want to get help deciding on the right Medicare plans for 2025 and to understand the implications of coming changes to your plans.
You can ask a Medicare broker or agent for assistance; there’s a directory at the National Association of Benefits and Insurance Professionals site. The sooner you do, the better, since agents and brokers will be swamped near the end of open enrollment.
“At Boomer Benefits, we have to stop taking new requests after Thanksgiving,” says Roberts.
If one of your prescriptions won’t be covered by your Part D plan in 2025, call your doctor to see if another covered medication would be okay or if you should find a new plan that includes it, Roberts advises.
For information about Part D and Medicare Advantage plans without purchase recommendations, try yourState Health Insurance Assistance Program or visit Medicare’s site or call Medicare’s toll-free number.
More time for open enrollment?
Soistman believes all the changes coming to Part D and Medicare Advantage plans for 2025 will push back the arrival of the Annual Notice of Change documents to the last two weeks of September.
If so, this will give people with the plans less time than normal to read the notices before open enrollment.
The eHealth agency has asked the Centers for Medicare and Medicaid Services to extend open enrollment by about five days to give beneficiaries, insurers, and Medicare brokers more time. Boomer Benefits favors the extension, too.
So far, the government hasn’t responded to eHealth’s proposal.
Could the 2025 open enrollment become Medicare’s equivalent of the Department of Education’s FAFSA financial-aid form fiasco of chaos and confusion?
“I don’t think it will be quite as drastic. I think it is going to be a year of change, though,” says Soistman. “And change is hard for people.” ********* Please follow me follow D. Kenton Henry @Https://HealthandMedicareInsurance.com
Editor, Broker, Agent – D. Kenton Henry TheWoodlandsTXHealthInsurance.com; HealthandMedicareInsurance.com
Each year, our Medicare Part D Drug Plan and Medicare Advantage Plan owe us our Annual Notice of Change (ANOC). Your plan is obligated to have it to us by September 30th. Resist the temptation to ignore it, AS MAJOR CHANGES ARE COMING OUR WAY!Your ANOC will arrive by U.S. mail along with dozens of solicitations for our Medicare insurance business. So, watch for it and review it carefully.
These changes are credited to the Biden “Inflation Reduction Act.” On the surface, they will undoubtedly benefit many seniors using prescription drugs. What remains to be seen are the consequences beneath the surface. The first is … at what cost (premium)? Your current plan’s 2025 premium will be in your ANOC. But we will have to wait until October 1 to know what the alternative plans will cost. This begs the question—because of the additional cost of these mandated improvements in benefits—will all these 30 different plans and their companies even remain in the marketplace? And what if yours doesn’t?
Let’s address the upcoming changes in benefits: We will begin with what your Medicare Part B premium to Medicare for Out-Patient Care will go to: For those earning less than $105,000 your premium will go to $185.00 (up from $174.70) For those in the highest income bracket, earning greater than $500,000 your premium will go to $628.90 (from $594.00) For every income block in between, couples filing jointly, and what Part D premiums to Medicare will go to, please click on this link and scroll down: https://www.irmaacertifiedplanner.com/2025-irmaa-brackets/
Relative to Medicare Part D Prescription Drug plans, as is the case in 2024, there is no beneficiary cost sharing above the annual OOP threshold. That will be $2,000 in 2025. That’s down from $8,000 in 2024!The coverage gap phase (also known as the “donut hole”) will be eliminated, which will result in standard Part D coverage consisting of a three-phase benefit: a deductible phase, an initial coverage phase, and a catastrophic phase. The annual Part D Drug Plan deductible caps at $590, up from $545 this year.
Here is how the changes take effect for the coming calendar years.
2025: The Inflation Reduction Act will lower out-of-pocket costs for Medicare Part D enrollees to a maximum of $2,000 per year. The Coverage Gap Discount Program will end and be replaced by the Manufacturer Discount Program. The standard Part D benefit design will also change to include three phases: deductible, initial coverage, and catastrophic coverage. The law will also require Part D plans to offer enrollees the option to pay for prescription drugs in capped monthly payments instead of all at once.
2027: Medicare will negotiate costs for 15 Part D drugs.
2028: Medicare will negotiate costs for 15 Part B and Part D drugs.
2029: Medicare will negotiate costs for 20 Part B and Part D drugs.
Every year after 2028: Medicare will negotiate costs for 20 Part B and Part D drugs.
IN REVIEW:
In 2025, Medicare Part D, the federal program that helps Medicare beneficiaries pay for prescription drugs, will undergo significant changes aimed at reducing out-of-pocket costs for seniors and improving access to necessary medications. These changes are part of the ongoing implementation of the Inflation Reduction Act (IRA) of 2022, which introduced sweeping reforms to the healthcare system, particularly in prescription drug pricing.
Key Changes in 2025
1. Introduction of a $2,000 Out-of-Pocket Cap
One of the most anticipated changes is the introduction of a $2,000 annual cap on out-of-pocket costs for prescription drugs under Medicare Part D. This cap will significantly ease the financial burden for many seniors who, in previous years, faced unlimited out-of-pocket expenses once they passed through the “donut hole” coverage gap.
This new cap means that once a beneficiary’s spending on covered drugs reaches $2,000 in a year, Medicare will cover the remaining costs, ensuring that seniors are not overwhelmed by high medication expenses.
2. Expanded Access to Low-Income Subsidies
Starting in 2025, eligibility for the Low-Income Subsidy (LIS), also known as “Extra Help,” will be expanded. Previously, this subsidy was available only to individuals with incomes up to 150% of the federal poverty level. In 2025, the threshold will be increased to 200% of the federal poverty level, allowing more seniors to qualify for additional financial assistance. This expansion is expected to help millions of low-income seniors reduce their prescription drug costs even further.
3. Price Negotiations for High-Cost Drugs
Another major change is the implementation of Medicare’s ability to negotiate drug prices directly with pharmaceutical companies. Starting in 2025, Medicare will begin negotiating the prices of 20 high-cost drugs that are covered under Part D. This is a historic shift in policy, as Medicare has previously been prohibited from negotiating drug prices.
The drugs selected for negotiation will be among the most expensive and widely used by Medicare beneficiaries. The goal is to bring down the cost of these medications, resulting in lower premiums and out-of-pocket costs for beneficiaries.
4. Elimination of the Coverage Gap (Donut Hole)
The infamous “donut hole” in Medicare Part D coverage will be fully eliminated in 2025. This gap in coverage previously required beneficiaries to pay a higher percentage of their drug costs after their spending reached a certain limit until they qualified for catastrophic coverage. With the donut hole’s elimination, seniors will no longer experience a sudden increase in out-of-pocket costs, making drug costs more predictable and manageable throughout the year.
5. Enhanced Catastrophic Coverage
In conjunction with the out-of-pocket cap, changes to catastrophic coverage will also take effect. Once a beneficiary’s drug spending surpasses the $2,000 threshold, they will enter catastrophic coverage, where Medicare will cover 100% of the drug costs for the remainder of the year. Previously, beneficiaries were still required to pay 5% of their drug costs even in the catastrophic phase.
Impact on Beneficiaries
These changes are expected to have a profound impact on Medicare beneficiaries, especially those with chronic conditions who rely on expensive medications. The $2,000 out-of-pocket cap, in particular, is seen as a game-changer, as it will provide financial relief to millions of seniors who previously faced unlimited costs for their medications.
The expansion of the Low-Income Subsidy will also bring much-needed assistance to a broader range of seniors, ensuring that those with limited financial resources can afford their prescriptions.
To further assist Medicare recipients with large prescription drug costs until such time as they have reached their $2,000 annual maximum out-of-pocket, Medicare is implementing the MEDICARE PRESCRIPTION PAYMENT PLAN (M3P), also known as the “Smoothing” because it allows Medicare Part D beneficiaries to pay their of Out-of-Pocket Prescription Drug Costs Over the course of the Year.”
Elements of M3P:
Monthly Installments: Starting in 2025, beneficiaries will have the option to spread out their out-of-pocket costs over the course of the year, rather than paying large sums at once when they fill prescriptions. This “smoothing” option is designed to make it easier for beneficiaries to manage their drug costs.
All Part D members will be eligible to opt into the program for 1/1/2025, regardless of low-income status.
Once opted into the program, members pay $0 at the pharmacy.
The drug plan will pay the pharmacy the cost of the drug in full along inclusive of the member’s cost share. The Medicare recipient will then pay their drug cost in monthly installments, billed by the plan, over the course of the year, using the Center for Medicare Services (CMS) prescribed payment methodology.
As alluded to previously, these improvements in benefits will not be without consequences. While the 2025 changes to Medicare Part D are widely welcomed, they are not without controversy. In addition to potential increases in Part D and Medicare Advantage Part D premiums, some critics argue that the drug price negotiation process could lead to reduced access to certain medications if pharmaceutical companies decide to withdraw drugs from the Medicare program rather than negotiate lower prices. There are also concerns about the long-term sustainability of these reforms and their potential impact on the pharmaceutical industry’s ability to innovate.
Conclusion:
As 2025 approaches, Medicare beneficiaries should begin to familiarize themselves with these upcoming changes and how they may affect their prescription drug coverage. The enhancements to Medicare Part D reflect a broader effort to make healthcare more affordable and accessible for seniors, addressing long-standing issues in the system. While the full impact of these reforms will unfold over time, the changes in 2025 mark a significant step forward in improving the financial security and well-being of millions of Medicare beneficiaries.
For changes in covered and non-covered drugs, see Feature Article 1 below.
Please contact me directly with any questions or concerns as the details of changes to your current plan become available. I can help you review all the 2025 options available to you in the marketplace and would welcome you as a client. Remember, we can enroll in a new Part D Drug Plan for 2025 beginning 10/15/2024.
Donald Kenton Henry, Jr
Office: 281-367-6565 Text my cell 24/7 @ 713-907-7984 Email: Allplanhealthinsurance.com@gmail.com Https://HealthandMedicareInsurance.com Https://Allplanhealthinsurance.com
FEATURE ARTICLE 1:
Study Finds Drug Coverage Changes in Medicare Part D Plans
Avalere’s Kylie Stengel talks about the regional shifts in formularies and utilization management in Medicare Part D prescription drug plans.
The number of both the standalone prescription drug plans (PDP) and the low-income subsidy (LIS) benchmark plans in Medicare Part D decreased between 2023 and 2024, according to a new review from Avalere.
Of the 801 prescription drug plans offered in 2023 across the United States, 95 were no longer offered in 2024, which is a decrease of 12%. Additionally, almost half of Medicare beneficiaries enrolled in the low-income benchmark plans were in plans that lost benchmark status, meaning enrollees had to choose a new plan or pay a premium in 2024.
“We did see a reduction in the number of PDP offerings in general, but this is really a significant decrease in specifically the LIS benchmark plan offerings,” Kylie Stengel, associate principal at Avalere said in an interview. “We do believe that is due to the changing market conditions under the Inflation Reduction Act, although not all of the IRA changes are in effect as of yet. These changes together have changed how plans thought about their offerings for 2024.”
The Inflation Reduction Act’s $35 cap on insulin out-of-pocket costs went into effect in January 2023. Next year will see two important elements of the Inflation Reduction Act being implemented: a $2,000 cap on out-of-pocket costs under Part D and the Prescription Payment Plan, sometimes called the “smoothing” program, where beneficiaries with Medicare Part D drug coverage will have the option to pay out-of-pocket costs in monthly payments spread out over the year.
Medicare Part D provides prescription drug coverage to supplement traditional Medicare or Medicare Advantage plans. In 2023, more than 50 million of the 65 million Medicare beneficiaries were enrolled in Part D plans.
Seniors with low incomes are eligible for prescription drug coverage from plans that meet a certain benchmark for no additional premium costs. The benchmark is the maximum premium that the Medicare program will pay for drug plan coverage.
“The benchmark is an enrollment weighted average in each region,” Stengel said. “CMS takes the average of all bids from both PDP and Medicare Advantage plans and sets a premium amount by region.”
In its analysis, Avalere assessed data from the Part D Public Use Files for 2023 and 2024 from the Centers for Medicare and Medicaid Services. This data contains information about formulary, cost sharing, and utilization management for Medicare prescription drug plans.
Avalere researchers looked at coverage changes and focused on 24 of the most used, single-source branded drugs in five therapeutic categories: anticoagulants; asthma/chronic obstructive pulmonary disease (COPD) autoimmune; multiple sclerosis and pulmonary hypertension. Avalere, however, is not releasing the names of the drugs they analyzed.
Researchers conducted two sets of comparisons. In the prescription drug plans, they looked at. Changes in formularies from 2023 and 2024 and the differences for plans that exited the market. They also assessed the low-income benchmark plans for whether they maintained benchmark status and the differences in formularies in plans that lost and plans that maintained benchmark status.
“When you look under the hood, when you look at specific therapeutic areas and regions, there is a lot of variability,” Stengel said. “When you’re looking across all drugs at a national level, you might not see a lot of change.”
One of the biggest areas to see change was the coverage of drugs to treat patients with pulmonary hypertension. In 2023, 39% of plans covered the drugs for pulmonary hypertension. In 2024, just 30% of plans did.
Avalere also found regional differences in coverage for some therapeutic areas. For example, coverage of drugs to treat patients with multiple sclerosis was lower among plans that remained in the market in 2024 in 11 regions but higher in 13 regions.
Avalere found that cost-sharing changes were limited for autoimmune, multiple sclerosis, and pulmonary hypertension drugs. However, use of coinsurance for anticoagulants and drugs that treat patients with asthma/COPD increased substantially for all prescription drug plan comparisons.
For the low income subsidy benchmark plans, there were regional differences on the utilization management used for the anticoagulant drugs. In five regions, there was a 20-percentage-point or more difference in utilization management among plans that lost benchmark status compared with plans that maintained benchmark status.
“It’s hard to know what factors are driving this; we didn’t do an assessment in terms of why there might have been a decrease in coverage for some of these therapeutic areas. But pulmonary hypertension is an area with a lot of higher cost drugs so we thought might expect there to more changes,” Stengel said. “Plans might be reacting to the elimination of patient cost-sharing to reduce their financial risk.”
But she said it may be too early to predict plan offerings for 2025. “I think we can expect potentially there to be less enhanced plans in the market just because the overall the basic benefit is a richer compared with previous years.”
*(IF YOU WATCH TV, YOU HAVE SEEN THE HIGH-PROFILE COMMERCIALS FOR THESE DRUGS. IF YOU’VE BEEN PRESCRIBED ANY OF THEM, YOU KNOW HOW HIGH THE COST CAN BE. FOR MANY, PROHIBITIVELY SO. FOR DETAILS ON HOW RELIEF MAY BE COMING, PLEASE READ THE FEATURE ARTICLE AT THE BOTTOM OF MY OWN JUST BELOW.)
IT’S ALMOST TIME TO RE-SHOP YOUR MEDICARE ADVANTAGE AND DRUG PLAN FOR 2024
By D. Kenton Henry, editor, broker, agent
6 September 2023
With the Labor Day holiday behind us, summer is virtually over. And, the coming of fall brings Medicare’s Annual Election Period (AEP). For those new to Medicare, and as a reminder to those recipients who are not, this period runs from each fall. Beginning October 1, we can preview the new Medicare Advantage and Part D drug plans to determine which, if any, is superior to our current plan, and from October 15 to December 7, enroll in it. Our new plan selection will go into effect on January 1. Of course, if your current plan remains your best option, you need not do a thing, and it will roll right over into the new year. Simply continue to pay your premium.
But how will you know if a superior Medicare Advantage or Part D Drug plan exists for you in the coming year? First, your current drug plan owes you an Annual Notice Of Change (AOC). It must come in your U.S. mail by September 30. If they do not send it, they violate Medicare regulations. So be sure to watch your mail closely. I know we are all being inundated with advertisements this time of year in a frenzied attempt to garner our business, but sort through it long enough to find your AOC!
Then, please review it carefully. While it may remain virtually the same in the coming year, something inevitably changes. Be it the premium, the copays, the out-of-pocket maximum, the doctors and hospitals, or the drugs. Once you are aware of any changes, you must compare your plan to all the new plans in the new year. Or – you may simply call me. I have been in the medical insurance industry since 1986, specializing in Medicare-related insurance and Under Age 65 Individual and Family health insurance. As I and my clientele have grown older, I have focused even more on assisting Medicare recipients.
Researching and identifying a plan that is in my client’s best interest and making my recommendation is an annual service I provide them. While some can do it independently, my familiarity with all the options and the mechanisms for exploring and enrolling in them is so great that many find it easier to sit back and let me do the research for them. Then, if they agree with my recommendation, I am happy to enroll them, making the process go as quickly and smoothly as possible. There is no obligation to take my recommendation, nor is there any fee charged by me whether one does or doesn’t. Should you enroll through me, you will be charged no more for the product than if you walked through the front door and acquired it directly from the insurance company offering it. So I believe you get the benefit of my 37 years of experience in the market at no cost to you. While Medicare requires that I inform you, no one agent can represent every company and plan in the market, I do represent most. I have diligently researched which plans I believe will be most competitive for most people’s purposes and have studied and certified (tested) to be able to insure you with them. And more importantly, I have reviewed all of them relative to your needs before making my recommendation. On the rare occasion I am not appointed (contracted) with a company in your best interest, I will recommend them just the same and encourage you to enroll with them and advise you how to go about that. I do so in the hopes that it will begin a relationship with you and that – next year – I may be appointed with the company with which you wish to enroll.
So, while the leaves don’t fall much around here in October, they do turn brown. And Joe Willy Namath and J.J. Walker will soon be annoying you with their incessant and infernal commercials. Let these things remind you to call me for the answers to your Medicare-related questions and any guidance you would like. Remember, there is no cost to you for such, and, at the very least, you’ll know you are doing everything right and make another friend in the process.
Oh – again! Please read my feature article, which appears directly below this. The current administration is attempting to lower drug costs for Medicare recipients by allowing Medicare to negotiate lower drug prices, for the first time, with pharmaceutical companies. The article identifies 10 of the most expensive drugs they target for lower costs. If you, like me, have been exposed to the never-ending drug commercials accompanying your television programs, you probably can already guess what some of them are. Obviously, advertising works, and the companies must pay for it somehow!
Drugs Up for Medicare Price Cuts Fuel Drugmakers’ Legal Strategy
Ian Lopez: Senior Reporter
Nyah Phengsitthy: Reporter
Drugmakers are poised to change their lawsuits and bring new ones against the Biden administration now that the list of the first 10 drugs subject to Medicare price negotiations is out.
Bristol-Myers Squibb Co., Johnson & Johnson, and other companies with drugs up for negotiation are likely to amend their lawsuits against the price talks under the Inflation Reduction Act to better their chances at taking down the program, legal analysts say.
Amending complaints could bolster the plaintiffs’ chances at overcoming government arguments that they lack standing to sue and allow them to later move for summary judgment or request a preliminary injunction.
Companies like Amgen Inc. and Novo Nordisk that have drugs on the list but haven’t sued yet may do so, or join suits already filed, attorneys say, contributing to a pharmaceutical industry legal strategy geared toward getting the US Supreme Court to intervene.
“Now that the list is announced, we’ll definitely see movement in the lawsuits, because beforehand it was a little more of a theoretical harm,” said Carmel Shachar, a professor at Harvard Law School. “I think we’ll see a big flurry of action when the prices are announced as well, with attempts to hold it up with injunctions and summary judgment.”
Drugmakers and industry groups that sued before the release of Medicare’s list issued statements afterward that they remain steadfast in their position that the price negotiation program is unconstitutional. Eight lawsuits were filed before the list announcement. Another company with a drug on the list, Novartis AG, sued after.
“The IRA’s price control provisions will constrain medical innovation, limit patient access and choice, and negatively impact overall quality of care,” J&J said. “The IRA’s policies put an artificial deadline on innovation, threatening intellectual property protections and shortening the timeframe to deepen our understanding of patients’ unmet medical needs. At the same time, seniors could face bureaucratic barriers to access and potentially higher out of pocket costs even with the IRA’s out-of-pocket cost limits for Part D drugs.”
Attorneys note that some of the lawsuits may be scaled back with the list out, while others are expanded to encompass new claims. Some judges may try and consolidate the litigation, the attorneys say.
They also note that more drugmakers may push courts for a preliminary injunction against the program to buy time while the litigation inches its way to the highest court.
“They’re not going to give this up quietly,” said Yaniv Heled, a professor at Georgia State University College of Law. “You can expect to see lawsuits, and then appeals, and then more lawsuits and then more appeals.”
‘Fight to the Bitter End’
The 10 drugs selected for pricing negotiations are Bristol-Myers and Pfizer Inc.‘s Eliquis, J&J’s Xarelto, Boehringer Ingelheim and Eli Lilly & Co.‘s Jardiance, Merck & Co. Inc.‘s Januvia, AstraZeneca PLC’s Farxiga, Novartis’ Entresto, Amgen’s Enbrel, AbbVie Inc. and J&J’s Imbruvica, J&J’s Stelara, and Novo Nordisk’s Fiasp and NovoLog insulin products.
Pfizer said it wouldn’t be leading negotiations over Eliquis’ list price and that the task would fall to Bristol-Myers. Eli Lilly similarly said the company “will not have any role in whatever price is set” by Medicare for Jardiance.
Novo Nordisk said it “will explore all options that allow us to drive change for people that need it and strive to continue to bring innovative medicines to the market while helping increase access for those that need them,” though it took issue with the government’s approach. Likewise, AstraZeneca said it would “evaluate our next steps over the coming weeks.”
Merck filed the first lawsuit to block the negotiations in June, followed by suits by other drugmakers and their allies, arguing the program was unconstitutional or violated procedural requirements for implementation.
They’re awaiting a decision from Judge Michael J. Newman of the US District Court for the Southern District of Ohio on the U.S. Chamber of Commerce’s request for a preliminary injunction—an ask that could halt the program before negotiations even begin.
The Chamber asked the court to rule before the Oct. 1 deadline when drugmakers must decide if they will enter negotiations. The group said the Biden administration didn’t do its “homework” to understand price control schemes and is rushing for implementation.
“They had a year to research these basic questions,” Neil Bradley, the Chamber’s executive vice president and chief policy officer, said in a press call.
Drugmakers who’ve already filed lawsuits will “fight to the bitter end,” Heled said.
“I can’t imagine that the litigations are going to end before these prices are supposed to take hold or go into force,” Heled said.
Drug manufacturers on the list will also “definitely” want to amend their complaints, said Laura Dolbow, a fellow at the University of Pennsylvania Law School who specializes in administrative law.
Companies may also amend their complaints to include additional causes of actions, said Andrew Twinamatsiko, associate director of the Health Policy and the Law Initiative at Georgetown University’s O’Neill Institute. For example, plaintiffs arguing the program violates the First, Fifth, and Eighth Amendments of the Constitution may consider raising Administrative Procedure Act claims like those in recent lawsuits from AstraZeneca and Boehringer Ingelheim.
Drugmakers “could find a creative way of going around” the drug pricing law’s preclusion of judicial review of prices, he said.
More constitutional claims could emerge, and the courts could have a “remarkably large number of potential avenues to consider,” said Robin Feldman, a law professor at the University of California, San Francisco.
“What are they not claiming?” Feldman said. And “lawsuits already filed have named more constitutional provisions than most people knew existed.”
‘No Standing’
Astellas Pharma Inc., which filed a suit July 14, ended up with none of its products on the list. Legal experts expect Astellas’s case to be dismissed.
The drugmaker said in a statement that no decisions have been made regarding its lawsuit, but it remains confident in its stance that the program “would result in lower costs for the government, but not necessarily reduce out-of-pocket costs for patients.”
The case brought by trade group Pharmaceutical Research and Manufacturers of America also faces possible dismissal.
The Biden administration filed a motion to dismiss the PhRMA suit in the US District Court for the Western District of Texas a day before the list came out, specifically asking that the National Infusion Center Association be dismissed because it lacks standing and failed to allege that the federal program will cause any of its members an injury.
The actions drugmakers with products on the list take now could affect what other manufacturers will do in the future, said Nicholas Bagley, a law professor at the University of Michigan. The experiences of the drugmakers in the first round of negotiations could set the precedent for price talks in later rounds.
“If you’re a manufacturer who doesn’t have a drug listed, you’re likely to sit back and watch these other litigants,” Bagley said.
healthandmedicareinsurance.com 
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