MEDICARE
What Medicare members should be aware of as open enrollment inches closer
We are still a few months away from the 2024 Medicare open enrollment period to purchase Part C and D plans. Here is what we know about the changes that could be coming.
Though Medicare open enrollment is still a few months away, information on possible changes to the program and the plans that will be offered is beginning to emerge.
When is the Medicare Open Enrollment period for 2024?
In 2024, Medicare open enrollment will begin on Tuesday, 15 October, and end on Saturday, 7 December, giving Medicare members over a month to determine if any changes should be made to their plans for the coming year. Members should be aware, particularly those who are new to Medicare, that open enrollment is the only period during the year when plans can be adjusted. Open enrollment also only refers to Medicare Parts C and D, as Parts A and B are required components that all members must pay into.
What are the four parts of Medicare?
Part A
This covers hospital and hospice care, as well as some skilled nursing services.
Most people don't pay a monthly premium for Part A because it's included in Social Security benefits. However, the Part A deductible is $1,600 per stay. For those who haven't worked long enough to qualify for premium-free Part A, the monthly premium is $505 per month in 2024.
Part B
Part B includes doctor visits, diagnostic tests, and other out-of-hospital services.
The standard monthly premium for Medicare Part B enrollees is $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries is $240 in 2023.
Part C and Part D
Part C, or Medicare Advantage, combines Part A, Part B and Part D, which helps pay for prescription drugs.
What changes have been announced for Medicare that will take effect in 2025?
In April, the Centers for Medicare and Medicaid (CMM) published a press release about the steps being taken to improve the experience and care of Medicare members.
More spending on Medicare Advantage and Part C plans
Firstly, regarding Medicare Advantage Plans or Part C plans, the federal government plans to expand spending by $16 billion or 3.7 percent between this year and next. This will include more than half a trillion dollars towards “private health plans” to cover Medicare Advantage payments. Additionally, the CMM announced recently that they expect enrollment in Medicare Advantage plans to increase by 5.6 percent between 2023 and 2032. “Enrollment gains in direct-purchase plans (which include Marketplace plans) are expected through 2025 related to the temporary extension of enhanced Marketplace subsidies and the Special Enrollment Period,” reported the CMM. However, enrollment is expected to fall as these subsidies end in 2026.
What is the difference between a single-payer and market-based healthcare model?
In a market-based insurance system, the government pays private companies, so they are incentivized to offer plans in areas where doing so might be expensive. This differs from public healthcare systems or a single-payer system, where the government acts as a large healthcare provider using taxpayer dollars. In some areas, offering service is cheaper, and in more rural geographies, it is more expensive, with the idea being that pooling costs together lowers them for the majority. Even in cities where creating the infrastructure to provide robust care would be cheaper, having one buyer gives the government unparalleled market power and is thus able to incentivize suppliers to offer the best product at the lowest possible price. If there is only one contract for knee replacements every five years, companies have an incentive to secure that contract by providing a quality product at a unit price that would be attractive to the government. Since they will be the only game in town (or one of a select few suppliers), they will still likely generate substantive profits.
New rules regarding Part C plans included in the Inflation Reduction Act, though temporary, should help to bring costs down on prescriptions next year. These new restrictions cap annual out-of-pocket costs at $2,000 for those who purchase Part D plans. There may be Medicare members who have not purchased a Part D plan and who should consider whether electing to pay for one in 2025 will reduce their healthcare costs enough to justify enrollment.