Medicare enrollment: What to know about price, coverage changes for 2025

If you are among the tens of millions of Americans on Medicare, it's time to review your coverage options for the upcoming year.

Medicare's annual enrollment began Tuesday and will run through Dec. 7. Enrollees can renew or change their health insurance coverage during the intervening weeks.

Medicare is the federal health program for people 65 and older and younger adults with disabilities or other qualifying medical conditions. Slightly more than half of older adults, nearly 36 million, are expected to choose a private Medicare Advantage plan for 2025 rather than traditional, government-run Medicare.

Under Medicare Advantage, insurance companies such as UnitedHealthcare and Aetna contract with Medicare to provide consumers with insurance plans that typically include medical provider networks and impose some cost-sharing requirements such as copayments or deductibles.

The terms and in-network providers for private plans can change yearly, so new and existing Medicare enrollees should check their plans during enrollment, said Tricia Neuman, a senior vice president at KFF, a nonprofit health policy organization.

Neuman, who runs the KFF program on Medicare policy said, "It's a good idea for beneficiaries to take the time and go through the trouble of reviewing their plan(s) and comparing options to avoid unpleasant surprises in the coming year."

How much is private Medicare?

A Medicare fact sheet said the average premium for a Medicare Advantage plan with prescription drug coverage will be about $17 per month in 2025 down from $18.23 per month this year.

About 83% of enrollees will have the same or lower premium in 2025 if they remain with their current plan, the fact sheet provided by Medicare said.

Not all consumers will be able to keep their existing private Medicare plan, said Mary Beth Donahue, president and CEO of Better Medicare Alliance, which represents private Medicare plans.

Fewer than 1 in 10 consumers will have to shop for new plans because their existing coverage plans are being eliminated. An analysis by the private research firm ATI Advisory estimated about 2 million seniors have a Medicare plan that will terminate coverage in 2025 or will no longer serve the county where the person lives. According to ATI's estimates, 7% of consumers in a private Medicare plan will need to shop for a new plan.

How will my plan change in 2025?

Some Medicare plans are scaling back extra benefits and increasing deductibles, which means some seniors could pay higher out-of-pocket costs. Private insurers are scaling back coverage or changing offerings in response to lower reimbursement from Medicare, Donahue said.

Donahue said private insurers are – for the most part –protecting dental and vision benefits, which are not offered in traditional government-run Medicare. However, some special needs plans are scaling back benefits that cover transportation and meals.

A KFF analysis released Tuesday said the average Medicare beneficiary will have 34 prescription drug plan options in 2025, just two fewer than the 36 plans available in 2024.

How will my prescription drug coverage change?

There's good news for people prescribed medication for chronic conditions. Consumers whose prescription drug costs exceed Medicare's catastrophic coverage limit will get a big break in 2025.

The 2022 Inflation Reduction Act signed by President Joe Biden will cap out-of-pocket prescription drug spending for Medicare recipients at $2,000 next year. The law also gave the federal government authority to negotiate prices for some of Medicare's costliest drugs.

Private Medicare plans typically include prescription drug coverage. For consumers who pick traditional Medicare and also purchase Part D prescription drug coverage, premiums are expected to drop to $40 per month, down from $41.63 per month in 2024, according to Medicare documents.

A report this month from the nonpartisan Congressional Budget Office projected the prescription drug benefits changes would increase federal spending more than what budget analysts initially expected. Now, the CBO said the 2022 federal law would increase federal spending an additional $10 to $20 billion next year.

How is private Medicare different from traditional Medicare?

Consumers who sign up for private Medicare instead of traditional government-run Medicare pay lower monthly premiums and extra benefits such as dental, vision and gym memberships.

But there are tradeoffs if you choose these plans, said Neuman, the Medicare expert at KFF.

While traditional Medicare allows enrollees to choose from a wide variety of doctors and hospitals, private Medicare plans restrict access to a narrow group of networks of hospitals, doctors and labs. Private Medicare plans also typically have cost-sharing requirements, such as deductibles, and they sometimes require that a doctor or hospital obtain authorization for the plan to cover the cost of a test or procedure.

Traditional Medicare charges 20% coinsurance − the percentage of a medical bill a consumer must pay out of pocket for care. People on Medicare can purchase MediGap, a supplemental insurance plan that covers these extra charges, which can add up after an operation or hospital stay. People can only enroll in MediGap under certain conditions, such as when they turn 65 or when they first sign up for Medicare.

Need help figuring this out?

You can visit the Centers for Medicare and Medicaid Services website to learn the basics about enrollment and compare Medicare plans.

Consumers can also contact their state health insurance assistance program to connect with experts who can advise consumers. Experts offer free one-on-one sessions where they will answer questions about medical care and prescription drug coverage. This list can help you find counselors in your state.

You can also visit the nonprofit Medicare Rights Center for counseling about enrollment and benefits through its free national helpline at 800-333-4114.

This article originally appeared on USA TODAY: Medicare enrollment changes for 2025