Significant changes are coming to Medicare Advantage for the 2025 plan year. These changes have been prompted by congressional hearings addressing complaints about aggressive marketing tactics, false advertising, and persistent sales calls from large call centers.
New regulations have been enacted to curb these aggressive tactics. Here are the key changes:
- Crackdown on Call Centers: The Centers for Medicare & Medicaid Services (CMS) is implementing new rules to ensure that agent and broker compensation, especially those in large call centers, reflect only the legitimate activities required by agents and brokers. This means salespeople can no longer be offered incentives to enroll people, which aims to prevent individuals from being steered to some Medicare Advantage and Part D plans based on the agent or broker’s financial interests, rather than the prospective enrollee’s health care needs.
- Changes in Plan Compensation: CMS is finalizing requirements that redefine “compensation” to set a clear, fixed amount that agents and brokers can be paid regardless of the plan the individual enrolls in. This addresses loopholes that result in commissions above this amount that create anti-competitive and anti-consumer steering incentives.
- Changes to Medicare Part D: Changes in 2025 include a new $2,000 out-of-pocket spending cap, elimination of the coverage gap phase, a higher share of drug costs paid by Part D plans in the catastrophic phase, along with a new manufacturer price discount and reduced liability for Medicare in this phase.
- Payment Updates: Payments from the government to Medicare Advantage plans are expected to increase on average by 3.70 percent, or over $16 billion, from 2024 to 2025.
These changes aim to strengthen protections and guardrails, promote healthy competition, and ensure Medicare Advantage and Part D plans best meet the needs of enrollees. People should consult with their independent Medicare insurance agents to understand how these changes may impact their coverage.
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