Medicare AEP in Retirement – 5 Things You Need to Know
Medicare Annual Enrollment Period (AEP, October 15 to December 7, is one of the most critical times of the year for anyone who is eligible for Medicare. With the constantly evolving healthcare landscape, it’s crucial to understand your options and make informed decisions that align with your health and financial needs. Whether you’re already on Medicare or you’re about to turn 65 and eligible for the first time, the AEP offers a window of opportunity to review and adjust your healthcare coverage for the coming year.
But here’s the challenge: with all the choices, costs, and changes, how do you make sure you’re in the right plan? Are you prepared for potential Medicare plan changes in 2024, or aware of how your prescription drug coverage may be impacted? This blog will walk you through five essential tips you need to know during the Medicare AEP for 2025 so you can confidently choose the plan that’s best for you.
1. Review Your Current Coverage
Even if you feel comfortable with your current Medicare plan, it’s good practice to review it every year during AEP. Why? Medicare Advantage plans and prescription drug plans, also known as Part D plans, can change yearly. The insurance providers that offer these plans often update aspects such as premiums, copayments, coverage limits, and even provider networks.
In other words, you may have chosen a plan that was best for you in 2023 based on the options available. However, different options in 2024 may be even better, and how would you know without a yearly review? Insurance companies send out an “Annual Notice of Change” (ANOC) before AEP starts. This document will allow you to compare side-by-side what your plan currently offers and what will change in the following year. Be sure to review it carefully and bring it with you if you meet with a Medicare specialist. Making small adjustments could save you hundreds or even thousands of dollars over time.
2. Evaluate Your Costs
When it comes to Medicare, cost is often the determining factor in selecting a plan. However, the lowest-cost plan may not always provide the coverage you need. Medicare Advantage plans often come with varying premiums, deductibles, copays, and coinsurance amounts. Even plans that previously had a zero premium may introduce new costs in 2025.
For instance, in some cases, a $0 premium plan may start charging $15 or more monthly. Copayments for routine visits to primary care physicians could rise from $25 to $35, or the maximum out-of-pocket (MOOP) for 2025 could increase. This MOOP is the most you’ll have to pay for covered healthcare services within a year, and in 2025, the maximum out-of-pocket for Medicare Advantage plans is set at $9,400, significantly impacting those who may need extensive care.
If you are on a Medicare Part D drug plan, pay close attention to changes in the plan’s cost structure. Premiums may rise, or the tier system used for prescription drugs could shift, leading to higher out-of-pocket costs for your medications. Regularly reviewing and comparing plans can help ensure you’re getting the best value without sacrificing essential coverage.
3. Consider Added Benefits Beyond Medical
Medicare is not just about hospital and doctor visits—it also involves other valuable services such as dental, vision, hearing, and even fitness memberships. These additional benefits are often found in Medicare Advantage plans, but they can change yearly as well.
Some plans may scale back or eliminate certain benefits altogether. For example, a plan that included dental or vision coverage in 2024 may no longer offer those benefits in 2025. In some areas, Medicare Advantage plans include wellness programs like SilverSneakers, which offers gym memberships and fitness programs specifically for seniors. If these types of benefits are important to you, make sure they are still available in your chosen plan for the upcoming year. If not, you may want to switch to a plan that better meets your needs.
For those with Medigap (Medicare Supplement) plans, discounts on services like dental, vision, or hearing might not be part of the policy but can often be included as additional perks. This is why reviewing the fine print is essential during AEP.
4. Check Provider Networks
If you’re enrolled in a Medicare Advantage plan, your coverage is typically limited to a specific provider network. These plans often operate as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). Unlike Original Medicare, where you can visit any doctor or hospital that accepts Medicare, Medicare Advantage plans can limit your choices to specific healthcare providers.
Because these networks can change from year to year, it’s essential to confirm that your doctors and hospitals will continue to be in-network for the coming year. If a major provider leaves your plan’s network, you could end up paying significantly more out of pocket or being forced to switch doctors. Make sure to check that your preferred providers, especially if you have upcoming surgeries or treatments planned, will still be covered under your plan in 2025.
5. Review Prescription Drug Coverage
Medicare Part D plans, which cover prescription drugs, also change from year to year. In 2025, there are significant changes that will impact many Medicare beneficiaries. The maximum out-of-pocket (MOOP) for prescription drug coverage will drop significantly from $8,000 to $2,000. Once you reach this MOOP, you will pay $0 for covered prescriptions for the rest of the year, which is a massive benefit for those on expensive, brand-name medications without generic alternatives.
However, this reduction in out-of-pocket costs comes at a price for insurance companies, which will now be responsible for a larger share of prescription drug costs under the catastrophic coverage phase. As a result, premiums for Part D plans are expected to rise, in some cases by as much as 24%. This means that even if you’ve been happy with your current plan, you need to compare the new premiums and check whether your medications will still be covered at the same tier.
Additionally, drug formularies—the list of drugs covered by a plan—can change each year. If a drug you rely on moves to a higher tier, it could increase your out-of-pocket costs. Taking the time to compare plans and ensuring your medications are covered is crucial to avoid surprises at the pharmacy in 2025.
The Importance of Working With a Medicare Specialist
Navigating the complexities of Medicare can be overwhelming. Working with a Medicare specialist can make the process significantly easier. A specialist can guide you through the Medicare enrollment periods explained and ensure that you choose the right plan that fits your medical and financial needs.
At Peace of Mind Wealth Management, our team, including our Medicare Specialist Shawn Southard, is available to help you understand your options and ensure you are prepared for the upcoming year. Whether you’re a current client or new to us, you can schedule a complimentary phone call with Shawn or one of our advisors to review your Medicare plan and make sure it’s the best fit for you in 2025.
Schedule your complimentary call with us and learn more about “Medicare AEP 2025: 5 Things You Need to Know.” Remember, Medicare Annual Enrollment Period (AEP) is October 15th to December 7th.
By taking the time to review your coverage during the Medicare AEP, you can ensure that you’re getting the best value for your healthcare needs while securing your retirement plans and peace of mind.