Healthcare costs are rising in Massachusetts and across the U.S., and all health plans face affordability challenges. For retiree benefits, significant changes are coming that will impact Group Medicare plans, particularly Medicare Advantage and Part D prescription drug plans.
The changes, driven in large part by the U.S. Centers for Medicare and Medicaid Services, and the Inflation Reduction Act of 2022, will result in notable increases in premiums for retirees.
One key change is the cap for out-of-pocket expenses for Part D drugs, which will be $2,000 starting in 2025. While this offers significant relief for retirees, the financial burden shifts to insurance providers, leading to an increase in premiums.
Additionally, the Centers for Medicare and Medicaid Services has introduced new payment formulas and adjusted Medicare Part A and B deductibles, enhancing cost savings for retirees and increasing overall plan liabilities.
Costs are also rising across all aspects of health care in general, from pharmacy to medical services and increased hospitalizations.
Municipalities should prepare for these adjustments to ensure that local budgets can accommodate coming cost increases.
For more information on how these changes may impact a municipality’s insurance plan coverage and costs, local officials should contact their municipal health insurance provider. Members of MIIA’s Health Benefits Trust can reach out to their account executive with any questions.
