This recent Newsweek.com article:
https://www.newsweek.com/new-medicare-rule-could-force-seniors-switch-health-insurance-1928581 carefully examines a new Medicare rule under the Inflation Reduction Act could require seniors to switch health insurance plans or face penalties. This change particularly affects those who continue working past 65 and remain on their employer's health plan instead of Medicare.

Currently, seniors can avoid late penalties for Medicare Part D if their company's plan pays, on average, as much as the traditional Medicare prescription drug plan. However, starting January 1, employer plans may no longer be accepted to avoid these penalties due to changes in Part D coverage.

The key change is the introduction of a $2,000 out-of-pocket maximum for Part D coverage. Many employer plans have combined health and prescription maximums exceeding $2,000, potentially disqualifying them as creditable coverage. This could subject Medicare-eligible employees to late enrollment penalties.

The late enrollment penalty applies if, after the initial enrollment period, a person goes 63 or more days without Medicare drug coverage or a creditable employer-provided plan. The penalty is calculated as 1% of the national base beneficiary premium ($34.70 for 2024) multiplied by the number of months without coverage. This amount is permanently added to the monthly Part D premium.

To avoid confusion and potential penalties, seniors should take proactive steps:

1. Call ahead to ensure their Part D insurance replacement remains creditable.
2. Pay close attention to notifications from insurers about the creditable status of their prescription drug coverage.
3. Be mindful of these changes, especially if continuing to work past retirement age with employer-provided health insurance.

A financial literacy instructor at the University of Tennessee at Martin, Alex Beene, emphasizes the importance of this issue, noting that seniors are already facing high healthcare costs. He advises seniors to be vigilant about these changes to avoid missing out on significant savings.

The new rule presents a challenge for seniors who must now carefully evaluate their current coverage against the new Medicare standards. Those with employer plans that don't meet the $2,000 out-of-pocket maximum may need to consider switching to Medicare Part D to avoid penalties. This change underscores the complexity of healthcare decisions for older Americans and the need for clear communication and guidance from both employers and Medicare to help seniors navigate these important choices.

Contact Ted Czabanowski if you have any questions about .your current Medicare plan.

In the recent Forbes Magazine article titled: Biden's In Inflation Reduction Act Unravels Medicare Part D, the point is made that while the act may reduce inflation in parts of the US economy, it appears that it will also raise costs for seniors in the Part D program.
 
​The Inflation Reduction Act (IRA) of 2022, touted by Democrats as a means to lower Medicare costs for seniors, is having unintended consequences on Medicare Part D coverage. The Act authorized drug pricing "negotiations" and introduced measures like a $2,000 cap on annual out-of-pocket prescription costs and a 6% limit on yearly Part D premium increases.

However, the reality is that seniors themselves are bearing the cost of these supposed savings through hidden premium increases. The IRA's interventions are making the Part D drug benefit less attractive for insurers, leading to a significant reduction in plan options. Since 2006, the number of available plans has dropped by over 50%, with an 11% decrease in the past year alone.

Moreover, the remaining plans have become considerably more expensive. The average standalone Part D plan now costs $48 per month, a 21% increase from the previous year, with steeper increases projected for 2025. The new guidance is expected to exacerbate these trends, potentially leading to more restrictive measures like prior authorization or step therapy requirements.

The core issue lies in the IRA's focus on saving government money rather than benefiting seniors directly. While some provisions do save money for certain seniors, they shift costs onto insurers. The Medicare premium increase cap, advertised as 6%, applies only to one calculation used in setting monthly premiums, allowing actual costs to rise by 20-40% while still complying with the cap.

Furthermore, the price controls implemented by the IRA may deter generic competitors from entering the market when drugs go off-patent. The new guidance also indicates that Medicare officials will continue setting drug prices with minimal input from physicians and without a process to monitor the impact on medicine availability for seniors.

In essence, the Inflation Reduction Act, contrary to its promises, is leading to higher premiums, fewer choices, increased government control, and a situation where patients and doctors are left to navigate the consequences. While officials may overlook these issues, the Act appears to be undermining the Medicare drug benefit it was meant to improve.

Contact Ted Czabanowski if you have any questions about .your current Medicare plan.