Medicare in 2025: What You Need to Know
We’re big fans of Medicare and know how important this subject is for many of you. Here we take a dive into how medicare works, what to expect, and some important updates on the ever-changing landscape under our current administration. Big thanks to our clients who shared their experiences and thoughts on Medicare. In every generation, there are popular names, here we share thoughts from “the Pams”.
Confused by Medicare, or wondering how to apply? You’re not alone, and with recent changes to how Medicare is managed, it’s even harder to decipher the important details. As folks transition to Medicare, it can be nerve-wrecking, but once you are in the swing of it, Medicare is what Alexandra refers to as “the holy land of insurance.”
Pam Labellarte agrees, stating, “I love the ease of use. I love the simplicity. In 2020, I was diagnosed with colon cancer. Doctors were fantastic, and I went on chemo, I never saw a bill.” Others like Pam Lynch have concerns, however, sharing, “I have great concerns with the future of Medicare under the current administration. I got so disgusted and depressed about all the services being cut and the unqualified appointees, I had to quit watching [the news].”
So, what is Medicare? It is a federal health insurance plan for disabled folks and those aged 65 and older. In most cases, you gain access to Medicare upon turning 65. The process begins three months before your 65th birthday, when you can sign up for Parts A and B. Part A is hospital coverage, Part B is doctor coverage, and together, Parts A and B are called Original Medicare. Original Medicare covers 80% of your claims.
What does Medicare cost? The price for Original Medicare, Parts A and B, is dependent on your income. The more you make, the more it costs, ranging from $185 to $714.70 per month. The cost of Original Medicare is called Income-Related Monthly Adjustment Amount (IRMAA). You will often hear Alexandra, the President of The Insurance People, refer to IRMAA as “Medicare Tax”. This is the amount you pay the government to have 80% of your claims paid by Parts A and B, Original Medicare.
In addition to needing Parts A and B, you will also need additional insurances that have variable costs. Pam Lynch shares, “I have had a positive experience since I'm self-employed and have paid private insurance for years”. Pam’s transition, like many, saved her thousands a year in both premiums and out-of-pocket expenses.
What additional insurance is needed? We recommend supplemental plans. The most popular supplement plan right now is Part G. Part G pays the 20% of your claims that Original Medicare, Parts A and B, do not pay. You have a deductible of $257, and then everything is covered at 100% by A, B, and G after the $257 deductible. That $257 deductible is the Part B deductible that Part G does not pay on your behalf. There are other supplemental plans like Parts F, N, and M, but our favorite at this time is Part G.
What about my medications? The only thing that A, B, and G do not cover are medications, which are covered under Part D. Part D comes in a variety of plans from various carriers. During the Biden administration, a $2,000 out-of-pocket maximum was implemented, which is the lowest it has ever been. Another helpful change is that you can now pay these out-of-pocket medication costs using a monthly payment plan instead of in a lump sum.
Part D plans range in cost from $0 to $150 monthly, and you can change your plan yearly during the Part D enrollment period. Currently, that enrollment period is October 15th through December 7th.
What about Medicare Advantage? It’s true, you can forego Original Medicare and instead opt for a Medicare Advantage plan. Medicare Advantage Plans are run by corporations, which generally use provider networks to dictate your healthcare. With Medicare Advantage, you can only enroll during certain times of the year, and once you’re enrolled, you cannot make any changes until enrollment season. We’re not a fan of these plans and refer to them as “Disadvantage Plans” since certain treatments require prior authorization or may be denied, and then you are stuck with a plan that doesn’t fit your needs. Instead of Medicare Advantage, we recommend supplemental plans like Part G.
What kind of changes can I make once I enroll? It’s important to note that deciding on a Part G carrier is a more permanent decision. When you initially retire or turn 65, you can sign up for Part G without medical underwriting. However, if you wish to change it later, you will need to answer health questions and go through the medical underwriting process. So while it’s possible to change carriers, it should be done thoughtfully and is not always an available option for folks as they age and get sicker.
What about all these Medicare changes I’m hearing about in the news? Many changes are happening within the Center for Medicare and Medicaid Services (CMS). Folks like Pam Alexandroff are concerned about what they’re hearing. Alexandroff shares, “One has to be concerned in this political climate about what will be cut or reduced. We should all be concerned, and these are very rough times. The fact that there are some things it doesn’t cover that many Americans can't afford is a huge problem, and I would love to see that part of Medicare expanded. We need to make sure it is available for the generations to come.” Let’s get into the details.
Approval timelines and processes have changed. You have a three-month window to sign up for Medicare before your 65th birthday, and you should start sooner rather than later. Updated regulations have meant more required forms of identification, required phone calls, and even in-person visits to the Social Security Office to approve folks for Medicare or Social Security. Add staffing cuts to CMS, and you’re looking at a longer approval timeline than ever before. And, if you have a green card, you can expect to be required to apply in person, which is a new hurdle we have not seen before.
Some of the real-world consequences have been trying for our clients. Recently, a client of ours was made to travel back to the state she was born in to receive a sealed birth certificate to prove her identity. Why? The name on her social security card was a nickname different from her birth certificate, which, while no big deal in the 50s and 60s, meant out-of-state travel under these new regulations. This poses a challenge for people who do not have the means to travel, across states or even a few hours to their nearest social security office, which means more people are now at risk of losing or being denied coverage.
Pressure on the Medicare system is increasing. The Government is delaying Parts A and B payments to Medicare providers, and while larger hospital systems can handle the months of delayed payments, it’s causing smaller, more local practices to struggle and turn away Medicare patients. These smaller practices don’t have the bandwidth to take on new Medicare clients since they cannot afford to be without their receivables that long.
The Government is investing in Advantage plans, specifically. More money than ever is being invested in corporate-run Advantage plans, and because these corporations are in the business of making money, it’s not great news for Medicare users. Often, their approach to care leaves Medicare users with limited access to services. This is why we call these “dis-advantage” plans.
These changes really hit hard for low-income Medicare-Medicaid users. Medicaid is federal healthcare for low-income individuals, and some qualify for Medicare-Medicaid. Now, low-income 65+ folks are finding themselves in the position of losing their Medicaid and having to pay out of pocket for Supplement plans, something originally covered for them at no cost. For many, this change just isn’t feasible on a fixed income. Alexandroff shares her concerns about the connection to Medicare-Medicaid, “I have some very serious concerns, primarily its relationship to Medicaid. I am not concerned for myself, but I am concerned for those on Medicare-Medicaid having the funds to pay. One has to be concerned in this political climate about what will be cut or reduced.”
The enrollment window for Part D (Drugs) might be shortened. The Trump administration has suggested a shortened enrollment window for Part D, however, the details have not been clarified. A shortened enrollment window poses the risk of people not being able to sign up or switch their plans on time, especially with fewer workers to process these enrollments.
What now? The process to apply for Medicare is more arduous than ever, so if you’re turning 65 soon, stay on top of the deadlines so you can get your Original Medicare, Parts A and B, approved. Once that piece is done, you can apply for supplemental coverage like Parts G or D. Obviously, with all of these changes, we suggest connecting with a knowledgeable insurance agency, like us! If you’re looking to apply for Medicare, let us know.
The Medicare and Individual market changes we are seeing from the current administration are degrading these markets and products. These large changes on a vital resource for many effects those most in need, our lowest income earners, and our elderly population.
