Jack's Blog on Medicare Plan Choices

Medicare Supplement premiums do tend to go up every year.  Historically these increases have been reasonable.  However, following the COVID-19 pandemic, they did see some sharply higher increases.  These increases are largely blames on what is called “Increased Healthcare Utilization.”  Basically, that means that during the pandemic, many elective procedures and non-urgent medical care were postponed. Once the situation stabilized, there was a surge in demand for these services, causing a backlog. This led to higher overall healthcare costs, which insurers passed on to policyholders through increased premiums.

Medigap premiums are projected to increase in 2025 due to several factors including rising healthcare costs and inflation.  Additionally, legislative changes from Inflation Reduction Act, which aims to cap out-of-pocket costs for prescription drugs, could indirectly impact Medigap premiums as insurers adapt to new regulatory frameworks.

Of course, if you have a Supplement plan, you need a stand-alone Prescription Drug Plan.

Prescription Drug Plan (PDP) premiums are expected to rise in 2025 for several reasons:

1. Rising Drug Prices: The cost of prescription medications has been steadily increasing, driven by newer, more expensive drugs and inflation. These higher costs are directly reflected in PDP premiums as insurers adjust to cover the increased expenses.
2. Inflation Reduction Act (IRA): The Inflation Reduction Act (IRA), designed to reduce drug prices by allowing Medicare to negotiate the cost of certain high-priced medications, has led to speculation that insurers may raise premiums to offset potential revenue losses. In 2025, the out-of-pocket maximum for Medicare Part D will be capped at $2,000, ensuring that you won’t pay more than this amount for covered medications. While this change appears advantageous, insurers might increase premiums to compensate for lost revenue. Additionally, you may notice some carriers dropping or consolidating plans in different regions, potentially resulting in an automatic switch to a plan with higher premiums than you’re accustomed to.
3. Higher Utilization of Medications: As the population ages and more people need chronic medication management, there’s increased utilization of prescription drugs. This increase in demand raises costs for insurance companies, pushing them to raise premiums.
4. Inflation and Supply Chain Issues: I often receive calls from customers frustrated by the unavailability of certain medications, which are frequently out of stock. Many have become adept at tracking down their prescriptions, calling multiple pharmacies, and rushing to secure their medication before it sells out. General inflation and ongoing supply chain disruptions in the pharmaceutical industry have also increased the cost of manufacturing and distributing medications, contributing to rising premiums.

No need to panic. It all comes down to the numbers. What are you paying, and what benefits are you receiving in return? How much risk are you willing to take on? Generally, I recommend keeping your Supplement and Drug Plan if you can afford it. However, if you’re putting these costs on credit and not paying it off monthly, consider switching to a Medicare Advantage plan that includes drug coverage.

It’s likely we need to chat, so feel free to reach out! You can call me toll-free at 888-883-6074. Alternatively, you can schedule a time to talk using my interactive event calendar. Just visit: https://moreplansmorechoices.com/events/.

Here is my disclaimer.  I gather most of my information from Medicare.gov and CMS.gov and to the best of my knowledge, it is accurate.  Please use this information as a guideline.

Before choosing an Advantage or Supplement plan, ensure you have a thorough understanding of Medicare itself. When it’s time to explore your options, don’t fall for a sales pitch from a single company or an agent representing only one provider.

At “More Plans More Choices,” I can provide you with side-by-side comparisons from various insurance carriers. More carriers plus more plans equals more choices.

Call me toll free at (888) 883-6074