Medicare is a dynamic program with ever-shifting rules, coverages, and costs. Each fall, the Centers for Medicare & Medicaid Services (CMS) announces changes to the way benefits will be delivered in the coming year.

To provide accurate, relevant information to the older adults you serve—and help them make well-informed decisions on their health care coverage— keeping pace with Medicare’s evolution is critical. Below are highlights of major changes to Medicare from 2020 to today.

Changes to Medicare in 2025 

In 2025, several significant changes to Medicare are set to impact beneficiaries' coverage and costs: 

Elimination of the donut hole: The infamous "donut hole," which is also known as the coverage gap, where beneficiaries pay a larger share of their drug costs, will be fully closed. Previously, once beneficiaries reached a certain spending limit, they faced higher out-of-pocket costs. Starting in 2025, the donut hole is eliminated, making it easier to afford necessary medications. 

Cap on out-of-pocket costs: A $2,000 annual cap on out-of-pocket costs for beneficiaries starts in 2025. This measure is designed to ease the financial burden on those who require expensive medications. Once beneficiaries hit this threshold, their costs for covered prescriptions will be $0 for the rest of the year, providing greater financial security. 

Medicare prescription payment plan: Beginning in 2025, all Medicare prescription drug plans, including both standalone Medicare prescription drug plans and Medicare Advantage plans with prescription drug coverage, must offer enrollees the option to pay out-of-pocket prescription drug costs in the form of capped monthly payments instead of all at once at the pharmacy. Beneficiaries will have to contact their insurance plan or submit a Medicare Prescription Payment Plan election request form to choose this option. 

Expanded access to preventive medications: Medicare Part D will expand coverage for preventive medications, including certain vaccines and treatments for chronic conditions. This change is aimed at encouraging preventive care and improving health outcomes for beneficiaries, ensuring they have access to medications that can prevent more serious health issues. 

Medicare Part B premiums and deductibles: The standard monthly premium for Medicare Part B will increase to $185, up from $174.70 in 2024. The annual deductible for Part B services will rise to $257, an increase of $17 from the previous year.  

Medicare Advantage notifications: Starting in 2025, Medicare Advantage plans are required to send enrollees a mid-year notification detailing any unused supplemental benefits, such as dental or vision care. This initiative aims to ensure beneficiaries are aware of and can utilize available additional services.  

These updates are designed to enhance the affordability and accessibility of health care services for Medicare beneficiaries, reflecting ongoing efforts to improve the program's efficiency and effectiveness. 

Changes to Medicare in 2024

The impact of Inflation Reduction Act provisions continued in 2024 for Medicare enrollees:

• The current 5% coinsurance for catastrophic costs in Medicare Part D will be eliminated in 2024. The out-of-pocket threshold, after which 5% coinsurance begins, will be $8,000.
• From 2024-2029, annual Part D premium growth will be capped at 6% to ensure insurers and manufacturers do not pass their new financial responsibilities on to enrollees.
• Eligibility for the full Medicare Part D Low-Income Subsidy (LIS, or “Extra Help”) was expanded to beneficiaries with incomes up to 150% of the federal poverty level (FPL) starting in 2024. LIS lowers premiums and out-of-pocket costs for prescription drugs.
• A new CMS regulation published in September 2023 means low-income Medicare beneficiaries may be able to get help covering some or all of their Parts A and B out-of-pocket costs. This regulation, which took effect in October 2024, reduces red tape to make it easier to afford and access health care via Medicare Savings Programs (MSPs).

Changes to Medicare in 2023

Signed into law on Aug. 16, 2022, the Inflation Reduction Act of 2022 introduced a number of sweeping Medicare changes to be implemented over a period of several years.

The Medicare changes that took effect in 2023 include:

• Manufacturers of certain Part D drugs are now required to reimburse Medicare if the price of their drug rises faster than the rate of urban consumer price index inflation (CPI-U). Non-compliance will result in financial penalties.
• Monthly out-of-pocket cost sharing for insulin was capped at $35.
• All vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) became free for Medicare enrollees starting in 2023.

Also, beginning in 2023, there were changes to Medicare enrollment periods to help people enroll with fewer gaps in coverage:

• Initial Enrollment Period (IEP): Prior to 2023, people who enrolled in Medicare during the last three months of their IEP had to wait up to three months before their coverage began. Starting in 2023, that gap in coverage was eliminated. Coverage is now effective the first of the month after the month of enrollment for people who enroll in the last three months of their IEP. For example, if you turn 65 in May 2024, your IEP starts in February 2024 and ends in August 2024.Prior to 2023, people who enrolled in Medicare during the last three months of their Initial Enrollment Period (IEP) had to wait up to three months before their coverage would begin. Starting in 2023, that gap in coverage was eliminated.
• General Enrollment Period (IEP): Previously, coverage for people who enrolled in Medicare during the GEP would not begin until July 1. Starting in 2023, people who enrolled in Medicare during the GEP had their coverage begin the first of the month following the month they enrolled. Now, for example, if you enroll in Medicare in January, your coverage will begin Feb. 1. Beginning in 2023, if you enroll in Medicare during the General Enrollment Period (GEP), your coverage begins the first of the month following the month you enroll. Before 2023, coverage for people who enrolled in Medicare using the GEP would not begin until July 1.

Additional resources for more information:

• NCOA's 2023 Medicare Changes Webinar (recorded video)
• Q&A from NCOA's 2022 Medicare Changes Webinar (PDF)

Changes to Medicare in 2022

Some big Medicare changes affecting enrollees in 2022 included:

• Telehealth services. During the COVID-19 public health emergency (PHE), a new category of telehealth services was created (Category 3) representing a temporary addition to the Medicare telehealth services list. In 2022, CMS extended coverage of all Category 3 telehealth services until Dec. 31, 2023.
• Mental and behavioral health telehealth services. The following 2022 Medicare changes impacted the delivery of mental health-related telehealth services:  
  • As of Jan. 1, 2022, the Consolidated Appropriations Act (CAA) permanently removed all telehealth geographic restrictions that limited coverage to rural or identified health professional shortage areas. The CAA also made a patient’s home a qualifying "originating site" to access mental health-related telehealth services.
  • Permanent coverage was established for audio-only (telephone) treatment for mental health counseling and services from providers capable of providing two-way audio technology.
  • Permanent coverage was established for audio-only (telephone) treatment for mental health visits delivered by rural health clinics (RHCs), federally qualified health centers (FQHCs), and outpatient treatment programs (OTPs).
• Expanded virtual check-in made permanent. Starting in 2022, CMS permanently approved the use of expanded virtual check-in services for established patients.
• Physician assistant (PA) services. In 2022, CMS rules changed to allow PAs to bill Medicare directly for services provided under Medicare Part B. Previously, Medicare’s payment to PAs came through an employing agency or independent contractor.
• Changes to coinsurance linked with colorectal cancer screening. CMS implemented a gradual elimination of the coinsurance payment when a growth or polyp was found and removed as part of a colonoscopy screening. This reduction would take place over an eight-year period starting in 2022:
  • 20% for 2022
  • 15% for 2023-2026
  • 10% for 2027-2029
  • No copayment beginning in 2030
• Addition of a second specialty tier to Medicare Part D. Medicare Part D plans and Medicare Advantage plans with Part D were permitted to offer a two-tier specialty formulary applicable starting Jan. 1, 2022. The preferred or second tier must offer lower cost sharing than the plan’s first (or non-preferred) specialty tier. Plan sponsors have the flexibility to choose which drugs go on which tier.
• Part D Senior Savings Model. Open to standalone Part D plans and Medicare Advantage plans, the Part D Senior Savings Model includes a $35 maximum copay for a 30-day supply of some insulin products in the deductible, initial coverage, and coverage gap phases of the Part D benefit. Roughly 2,100 prescription drug plans participated in this Model for calendar year 2022.
• Special Circumstances Special Election Periods (SEPs). For years, enrollees have had the ability to contact 1-800-Medicare and request an exception to the current enrollment rules for Part D and Medicare Advantage. In 2022, CMS added a note on Medicare.gov that said: "If you believe you made the wrong plan choice because of inaccurate or misleading information, including using Plan Finder, call 1-800-Medicare and explain your situation.” This note expanded awareness of the Special Circumstances SEP to more people who can benefit from it.
• Additional resources for more information:
  • Slides from NCOA's 2022 Medicare Changes Webinar 

Lastly, in September 2021, numerous changes were made to the Medicare Plan Finder to improve the user experience in time for the 2022 Open Enrollment Period. These included the ability to save pharmacy and drug lists, in-network pharmacy indicators, and plan comparisons that were easier to read on mobile digital screens.

Changes to Medicare in 2021

Notable changes to the Medicare program in 2021 included:

• Acupuncture coverage under Medicare Advantage. In 2020, Medicare Part B began covering up to 12 sessions of acupuncture treatment for certain people with chronic lower back pain. Beginning in 2021, this coverage was extended to Medicare Advantage plans.
• End-stage renal disease (ESRD) and enrollment into Medicare Advantage. As of 2021, Medicare enrollees with ESRD were permitted to enroll in a Medicare Advantage plan. While dialysis coverage is offered by Medicare. Advantage plans (within their plan network), dialysis costs are reimbursed by Medicare Parts A and B.
• Initial Enrollment Period (IEP) reminder notice. Starting in late 2020, CMS began sending a separate reminder notice as part of the IEP, complete with information about the Medicare program, benefits, and coverage considerations. This reminder is sent one month before Medicare coverage starts, following the Welcome to Medicare packet sent to people auto-enrolled into Parts A and B.
• Prior authorization for certain hospital outpatient procedures. As of July 1, 2021, CMS updated the Prior Authorization for Certain Hospital Outpatient Department Services rule that took effect in 2020. This update included the addition of two service groups: implanted spinal neurostimulators and cervical fusion with disc removal.
• Additional resources for more information:
  • Q&A from NCOA's 2021 Medicare Changes Webinar (PDF)
  • A detailed primer on the 2021 changes from NCOA (PDF)

Changes to Medicare in 2020

The 2018 Bipartisan Budget Act and CMS regulations made significant programmatic Medicare changes to take effect in 2020:

• Opioid treatment coverage. Part B benefits were expanded to cover services provided at opioid treatment programs (OTPs). This treatment includes otoxicology (drug) testing, medication administration or dispensing, substance abuse counseling, and individual and group therapy. OTPs must be approved/accredited by SAMSA (Substance Abuse and Mental Health Services Administration).
• Medicare Part D indication-based formularies. Beginning in 2020, Medicare Part D plans were given the option to create indication-based formularies. This means Part D plans can choose to cover a drug for only certain uses (instead of all the uses approved by the FDA). For example, a plan may cover Drug ABC to treat headaches but not nausea, or vice versa. It does not have to cover Drug ABC for both FDA-approved uses. However, if a plan is covering a drug only for specific uses, there must be a comparable drug on the plan's formulary to address the non-covered use.
• Medicare Advantage coverage of supplemental benefits. Beginning in 2020, Medicare Advantage (Part C) plans were allowed to start covering supplemental benefits for plan members with chronic illnesses (e.g., asthma). These benefits are meant to address environmental factors that affect a person's quality of life and functioning. Examples include home air cleaning, meal delivery, and transportation services.
• Medicaid changes. On Nov. 6, 2020, the Centers for Medicare & Medicaid Services (CMS) published a new regulation (an Interim Final Rule with Comment Period or IFR) that allowed states to change which Medicaid program people are enrolled in, with some limitations.
  
  The new rule permitted a state to move people currently enrolled in the state’s Medicaid expansion program and who screened eligible for a Medicare Savings Program (including QMB, SLMB, and QI) to the Medicare Savings Program—even if the move resulted in a reduction of benefits. States were not permitted to disenroll people enrolled in a Medicaid expansion program, upon turning 65, or becoming eligible for Medicare, if the person did not screen eligible for the Medicare Savings Program. 
  
  This change went into effect on Nov. 2, 2020 and continued until the end of the COVID-19 Public Health Emergency on May 11, 2023.