You probably find lots of junk mail in your mailbox. But, if you are one of the 50 million beneficiaries with Part D prescription drug coverage, either through a stand-alone Part D drug plan or incorporated into a Medicare Advantage plan, pay attention now. Buried in that stack of mail will be the Annual Notice of Changes (ANOC), a letter about Open Enrollment and your Part D drug coverage for next year.
The Open Enrollment Period, October 15-December 7, is your chance to ensure you have the best plan in 2025 and the ANOC is your guide to the changes. A KFF analysis showed that only 3 in 10 beneficiaries (29%) compared their current plan with others during Open Enrollment. If I had the space, I could share dozens of tales of woe from those who got caught asleep at the wheel and woke up on January 2 to unpleasant cost and coverage issues.
This may be the most important Open Enrollment you have experienced. Why do I believe that? Six words – the $2,000 cap on drug costs. According to a White House fact sheet, this cap will save nearly 19 million Part D enrollees at least $400 next year. However, it will create cost and coverage challenges for many. Part D drug plans will pick up most of these costs so they likely will implement measures to reduce the hit. The elimination of the 5% Catastrophic Coverage coinsurance is one small step toward the $2,000 cap that is expected to save 1.5 million drug plan enrollees about $3,100. 65 Incorporated reviewed 2024 drug plans to identify the impact.
- 59 of 65 plans increased their monthly premiums, anywhere from 2% to 84%.
- Almost a third of drug plans changed a copayment to a coinsurance. One example, instead of $47, the cost sharing is 25%, increasing the out-of-pocket cost.
- And 30% of plans increased the coinsurance for Tier 4 and Tier 5 drugs. Even a change of 1-2% can increase costs by several hundred dollars a month.
We can expect to see more of the same with 2025 plans.
Here’s What To Do with the Annual Notice
Insurers sponsoring Part D coverage must send an ANOC to all plan members by September 30. The notice can be 15-30 pages or more, depending on your plan. The Centers for Medicare and Medicaid Services has a template that identifies some important pages. Check these out.
Page 4: A summary of important costs for 2025.
This summarizes the changes in premium and drug tier cost sharing. You’ll discover whether your premium is increasing and/or the tier costs for your drugs will change, especially a copayment changing to a coinsurance.
Page 6: Section 1, unless you choose another plan …
The plan you have this year may not be around next year. If that happens, you will be enrolled automatically in another plan. When this has happened in the past, plans tended to assign enrollees to the one with the highest premium.
Page 7: Section 2.2, changes to the pharmacy network.
The plan will alert you if changes have been made but you will have to research which pharmacies are in or out.
Page 8: Section 2.3, changes to Part D prescription drug coverage.
This is one of the most important sections in the ANOC. The plan must provide a copy of the drug list (unlikely) or electronically (a link). If there have been no changes to covered drugs, tier assignments, or restrictions (prior authorization, step therapy), you can breathe a sigh of relief. However, in the current environment, it’s more likely that there will be changes. The ANOC emphasizes, “Review the Drug List to make sure your drugs will be covered next year and to see if there will be any restrictions, or if your drug has been moved to a different cost-sharing tier.”
Pages 11-16: Changes to your cost-sharing in the drug payment stages.
You’ll find out the plan’s deductible and standard and preferred cost-sharing in each payment stage.
Next Steps
The ANOC will identify the changes in your plan but then, it’s up to you. You’ll need the Medicare Plan Finder to determine the impact of changes. 2025 plan information will start appearing in early October. CMS has a video, “2023 How to use Medicare Plan Finder, step-by-step,” that provides a good introduction to using this tool.
Here are a few questions you should answer.
- Are all your medications covered?
- How much will you pay for drugs?
- Did your pharmacy network change?
- Are there new restrictions on your medications?
- Is your premium increasing?
After completing this research, if your current plan will be the best for you in 2025, do nothing. The plan will renew automatically. However, if another plan will be better, enroll in it. The deadline is December 7 but don’t wait until the last minute. Things can get crazy.
With all the changes, there is little doubt that the 2024 Open Enrollment Period will be very important. The Annual Notice of Changes is your guide to identifying the best drug coverage in 2025 and the Medicare Plan Finder is the tool. Don’t blow this opportunity.