Big changes for medicare prescription drug coverage

IDAHO FALLS, Idaho (KIFI) — Open enrollment officially kicks off in Idaho on October 15, 2024 for the 2025 insurance year. While for some it doesn't bring many changes, this year will bring big changes to those on Medicare that have supplemental or Medicare Advantage Plans to help with prescription drug costs.

"The biggest changes we're seeing with prescription drug benefits through Medicare, is we're finally eliminating what's called the 'donut hole,'" said Sandi Herrin, a Medicare Certified insurance broker with Heritage Health Insurance Broker.

Until the end of 2024, the "Donut Hole" is a gap in prescription drug coverage that many seniors currently face. Essentially, once seniors and their insurance carrier pay up to just over $5000 within the year for prescription medications, the plan holder (i.e. you!) is instantly on the hook for 25% of the cost for the medications. That extra cost doesn't go away until the plan holder hits the out-of-pocket-max of $8000 within that insurance year.

For retired senior and Vietnam veteran Dick Brink of Idaho Falls, hitting the donut hole means major changes to their monthly budget. "When we first got my blood thinner pills, we got three bottles for $167. Then when we hit the donut hole, it went up to almost $500 for three bottles," said Dick Brink. "How can they charge that?"

Since donut hole affects all medication prices, Brink is also forced to go from paying $47 to $150 for his respiratory inhalers. To cope, Brink and his wife cut back where they can. "We vary in what we shop for. Sometimes we eat more pasta," said Brink. "We definitely aren't buying any steak anytime soon."

Starting in 2025, the donut hole will be eliminated. All Medicare plans will come with a $2000 out of pocket max for prescription drug costs with standard payment methods and copays the entire time. The goal of the change is to prevent seniors like Brink from having a mid-year surge in medication costs.

Herrin says while the elimination of the donut hole was needed, it does come with some potential consequences. "Now that the burden of that out-of-pocket maximum is on the (insurance) carriers, several carriers in this area and all of the nation have actually dropped out of the game," said Herrin. "They are no longer providing coverage."

Herrin says seniors need to meet with their insurance brokers to confirm their current insurance carrier will continue covering the medications they need. "They (insurance brokers) are going to be able to look at that, go through all your prescription medications, determine if they're still on their formulary, and at what cost," said Herrin. "Some carriers may still provide coverage, but the costs might go up. So you may want to consider switching anyways."

Open enrollment for Medicare goes from October 15, to December 7 of this year. Herrin encourages people to sign up early with their brokers as many tend to get booked up, especially towards the end of the enrollment period.