Which changes could happen to Medicare after the election. In this article we explore which, if any changes could potentially happen and what to watch for.
Medicare, the federal health insurance program for people aged 65 and older and certain younger individuals with disabilities, has long been a political hot topic. With the 2024 election coming up soon, many Americans are wondering what changes could come to Medicare depending on the outcome.
Given the different policy priorities of political parties and candidates, Medicare may be impacted in various ways, ranging from benefit expansions to cost-control measures. Here are some potential changes that could happen to Medicare after the 2024 election.
Inflation Reduction Act
Some of the most significant changes coming to Medicare after the 2024 election relate to the Inflation Reduction Act (IRA), which the Biden administration signed into law in 2022. The IRA aims to address the rising costs of the U.S. economy, including healthcare for seniors and others enrolled in the Medicare program
The IRA timeline began in 2022 and will continue through 2029, with changes including decreased cost-sharing for beneficiaries, expanded coverage, drug price negotiations, and more. In 2025, Medicare beneficiaries will see major changes to the Medicare Part D program (prescription medication coverage) to reduce out-of-pocket spending.
2025 Part D $2,000 Cap
One of the changes coming to the Part D program is the elimination of the coverage gap, also known as the “donut hole.” Currently, when someone enters the coverage gap, there is a limit on what their Part D plan will cover, often resulting in higher costs for the beneficiary.
However, starting in 2025, the coverage gap will be gone, and all Part D plans will have a $2,000 cap for medications covered by someone’s plan. Once someone meets the $2,000 cap, they will have no more out-of-pocket costs for drugs covered by their plan for the remainder of the year.
Although this will help lower out-of-pocket costs for Part D participants, there are worries that there will be cost increases elsewhere to compensate. For example, people with Part D coverage receive a Medicare Annual Notice of Change (ANOC) packet each year informing them of any changes coming to their plan for the upcoming year. This year, some people have reported that their Part D plan’s premium will have a high increase for 2025, which typically has not been the norm in past years.
2025 Part D Manufacturer Discount Program
2025 will also introduce a new Manufacturer Discount Program for Part D to replace the coverage gap. Under the new discount program, drug manufacturers must supply covered Part D medications at a discounted rate for beneficiaries. These new changes to Part D also apply to Part D cover included in Medicare Advantage plans.
Addressing Medicare’s Financial Stability
There have been ongoing discussions about how Democratic and Republican administrations will approach Medicare. In particular, Medicare’s financial health has been a common topic that leaders could address after the 2024 election.
The Medicare Hospital Insurance trust fund (HI), which funds Medicare Part A (inpatient hospital insurance), has faced some potential financial challenges. According to CMS’s 2024 Annual Report of the Boards of Trustees, the HI trust fund is projected to become insolvent in 2036. If so, it’s estimated that Medicare would still be able to pay 89% of Part A costs. 1
To ensure Medicare’s sustainability, lawmakers may propose various potential solutions, such as increasing the Medicare payroll tax, reducing payments to healthcare providers, or introducing new cost-sharing measures for beneficiaries. The approach taken will depend on the administration and lawmakers. Conservatives are more likely to propose measures that reduce spending, while liberals may favor increasing revenue through taxation on higher-income earners.
2025 Medicare Cuts
There has also been discourse around whether the Medicare program will receive cuts and, if so, what that would look like. Both parties claim they will continue to support Social Security and Medicare protections in the best interest of beneficiaries, without many particulars. The extent and specifics of Medicare cuts, if any, will largely depend on the political climate and economic conditions, as well as the priorities of the lawmakers and the federal agency in charge of Medicare, Centers for Medicare and Medicaid Services (CMS) in 2025.
As of now, CMS has not reported any “cuts” to benefits that will be made in 2025. The major changes to the Medicare program will follow the structure set out in the IRA.
Finishing Thoughts
The future of Medicare is uncertain, but the 2024 election could bring new policy proposals. Medicare’s direction will largely depend on the political priorities of the newly elected leaders and the decisions of lawmakers and CMS.
Staying informed about potential changes is important for Medicare beneficiaries and future enrollees. Decisions made in the coming years will shape the future of healthcare for many Americans, not only the cost of care but also the range of services available to Medicare beneficiaries.
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