Medicare Open Enrollment Is Full of Surprises and Pitfalls for Members This Year

As expected, the start of the Medicare Open Enrollment Period revealed major changes in plan availability and pricing. The biggest changes are in Medicare Advantage plans and Part D prescription drug plans.

We knew significant changes were on the way due to announcements from major insurers and policy changes from the Centers for Medicare and Medicaid (CMS). Revisions to the law also made a turnaround likely, especially in Part D plans.

Preliminary CMS data released ahead of open enrollment (which runs from October 15 to December 7) summarized the changes.

There are 6.6% fewer Medicare Advantage plans with prescription drug coverage available in 2025 than in 2024. UnitedHealth Group is offering 5.4% fewer plans and Humana will have 2.5% fewer plans.

An average of 34 Advantage plans will be offered in each county in 2025, compared to 43 in 2024.

Medicare Advantage plans that cover 1.5 million beneficiaries in 2024 will be phased out by 2025, according to an estimate from insurance brokerage Medicare HealthPilot reported in The Wall Street Journal. An estimated 3.5 million more people will lose their Part D plans.

CMS emphasized a positive point. The average monthly premium on Advantage plans will fall to $17.00 in 2025 from $18.23 in 2024. Many Advantage plans still impose no additional monthly premiums. (Advantage plan members must pay the regular Medicare Part B premium.)

But the prizes are just part of the package. Beneficiaries need to analyze the total costs and benefits.

Advantage plans are popular in part because they offer add-on benefits like dental and vision care, gym memberships, and more. They also bundle prescription drug coverage into the benefits package.

Because CMS has taken steps to reduce its costs and make Advantage plans less profitable for insurers, it is likely that many Advantage plans will offer fewer supplemental benefits in 2025 than in 2024.

Furthermore, premiums are not the only cost to beneficiaries. Lower premiums may be offset by higher deductibles and copays.

When looking at Medicare Advantage plans, an important metric is the maximum out-of-pocket cost. This is the amount you’ll pay if you need a lot of medical services during the year and incur a plan’s deductibles, copays, and maximum premiums.

Even so, the maximum direct cost may not be the final value. The estimate generally does not include your share of any supplemental benefits, such as dental, vision, and hearing services. It also only includes services received from providers within the plan’s network. You pay higher costs for out-of-network care.

Advantage plans may also reduce other benefits, such as the number of prescription drugs covered or the cost of the drugs for beneficiaries.

Another change beneficiaries should be aware of is that some health care providers have announced that they will not accept or participate in certain Advantage plans.

For example, Sanford Health, a major medical provider in the Midwest, said it would no longer accept Humana’s Advantage plan. Essentia Health said it would no longer participate in UnitedHealthcare and Humana Advantage plans.

Other providers have already stopped participating in Advantage plans in 2024, and in a recent survey, about 16% of medical providers said they planned to stop accepting at least some Advantage plans in the next two years.

Medical providers say Advantage plans offer low reimbursement rates, deny coverage for recommended treatment too often, and are slow to pay providers.

Medical care is fully covered by an Advantage plan only when the provider is in the plan’s network. For out-of-network care, beneficiaries must pay all or most of the costs.

The doctors, hospitals, and other providers you want to provide care to may no longer participate in an Advantage plan. Check the list of plan providers during open enrollment to make sure the top providers you want are still on the list for 2025.

One potential change that a beneficiary likely won’t learn about until 2025 is that an Advantage plan may deny coverage for doctor-recommended procedures and services, forcing patients to appeal decisions or forgo treatments. Some Advantage plans may change their approval policies.

Part D prescription drug plans will also be very different in 2025. CMS reported that there will be about 25% fewer Part D policies offered for 2025, bringing the number offered to the lowest since the inception of Part D .

Many of the Part D plans offered have higher premiums, deductibles, and other charges that will increase out-of-pocket costs for beneficiaries. A plan may also cover fewer drugs than last year or move drugs to different tiers. The level at which a medicine is determined determines the amount the beneficiary will pay for it.

It is more important than ever for Medicare beneficiaries to study the details of their coverage options during this year’s Open Enrollment. Make sure you know what’s changing from 2024 to 2025.

In the past, beneficiaries did not do a good job researching and comparing Advantage plans. During Open Enrollment in 2021, 65% of Advantage plan members did not compare plans and 43% did not even check changes made to their current plans, according to the Kaiser Family Foundation.

Some people may want to abandon Medicare Advantage and opt for original Medicare.

Be aware that original Medicare has coverage gaps. You can fill most of the gaps by purchasing a Medicare Supplement, or Medigap, policy in addition to a Part D prescription drug policy. But if you’re not in the early Medicare enrollment period, insurers may deny you a Medigap policy. or charge a high premium based on your medical history. Insurers must issue a policy, however, if you are switching to original Medicare because you were on a Medicare Advantage plan that has been discontinued.

Beneficiaries often say they have difficulty understanding and comparing plans. That’s why it’s a good idea to work with one or more local insurance agents who focus on the Medicare policies and plans available in your area. Look for agents who research many different insurance companies, rather than agents tied to one or two insurance companies.

Another option is the State Health Insurance Assistance Program, known as SHIP, a federally funded program available through state governments. SHIP has trained volunteers who guide beneficiaries through their options and help them make decisions. SHIP is free and open to all Medicare beneficiaries.