Page 2
Part D Rip-off -- AGAIN
Potential Challenges for Middle-Income Seniors -- Its No Joke
Early-Year Financial Strain: Seniors who require high-cost medications could hit the $2,000 cap within the first few months of the year, leading to financial difficulties for essential living expenses such as housing, food, and utilities
Savings Depletion: Those living on fixed incomes without eligibility for assistance programs may need to dip into savings, exacerbating long-term financial insecurity
Increased Dependence on Credit or Loans: Many may resort to credit cards or personal loans to cover medical expenses, leading to debt accumulation.
Rising Premiums and Copays in the Future: As Medicare Part D insurers adjust to the new rules, premiums and other cost-sharing elements may increase, potentially offsetting the perceived benefit of the out-of-pocket cap.
No Safety Net: Middle-income seniors don’t qualify for subsidies like Extra Help, yet they may struggle with fixed incomes that don’t allow for large healthcare expenditures.
Inflationary Pressures: Rising costs for essentials such as housing, groceries, and utilities make it harder to allocate savings for medical expenses.
Potential Strategies for Middle-Class Seniors to Manage Costs
Enroll in the Medicare Prescription Payment Plan (NEW in 2025)
• Although not an ideal solution, this plan allows seniors to pay their annual prescription costs in monthly installments instead of facing a lump-sum expense at the beginning of the year.
Action
-
This option could help with cash flow management for those with tight monthly budgets.
-
Check with your Medicare Part D provider.
If possible, consider a High-Deductible Health Plan (HDHP) & Health Savings Accounts (HSA)
• If you still have an HSA from pre-Medicare employment, you can use it to pay for Medicare
Part D out-of-pocket expenses, including upfront drug costs
Action:
• Review any remaining HSA funds and plan to use them for 2025 Medicare expenses.
Employer or Union Retiree Drug Benefits
• Some retirees may have access to supplemental employer-sponsored prescription plans that coordinate with Medicare Part D to help cover costs.
• If you’re eligible, these plans can help spread out or reduce expenses.
Action
• Contact your former employer or union to see if additional benefits are available.
Advocate for Policy Changes Targeting Middle-Class Needs
• While low-income seniors have specific government programs, middle-class individuals
must advocate for changes such as:
- Income-based sliding scales for Medicare Part D subsidies
-Monthly or quarterly spending caps instead of annual limits
-Tax credits for prescription costs.
Action
• Engage with organizations like AARP or Medicare Rights Center to push for middle-class-
friendly Medicare reform.
Prescription Discount and Manufacturer Assistance Programs
While these programs are often associated with low-income support, many manufacturers do not have income limits for savings programs on expensive drugs. Discount services such as:
• Manufacturer Savings Cards: Many pharmaceutical companies offer discounts on high-cost
drugs (even for Medicare users)
• Cost Plus Drugs: The Mark Cuban Cost Plus Drug Company offers affordable generic
medications (appears to be an excellent approach to finding your solution)
• GoodRx and SingleCare: Discount cards may provide lower costs than Part D insurance for
some prescriptions (can also be very helpful).
Action:
• Compare costs through these programs before filling prescriptions under Medicare
Flexible Budgeting and Financial Planning
With the new upfront cost structure, working with a financial planner to adjust cash flow strategies for early-year expenses can help preserve savings and investments.
Action:
Consider setting aside a dedicated healthcare savings fund to handle expected early-year costs in 2025.
Consider Generic and Therapeutic Alternatives
• If your current medication is costly, consult your healthcare provider to explore whether a therapeutic equivalent or generic alternative can lower costs without compromising efficacy.
Action:
• Schedule a medication review with your provider before to identify cost-saving opportunities.
Long-Term Considerations for Middle-Class Seniors
Supplemental Insurance Options: Some Medigap policies offer limited prescription drug coverage, which could help alleviate some of the burden.
Spousal Coordination: If both spouses are covered, optimizing who carries specific coverages based on drug needs could help save costs.
Conclusion
For middle-class seniors, the financial impact of the Medicare changes in 2025 requires proactive planning and strategic financial management. While available resources may not directly target this demographic, options like spreading out costs, exploring employer benefits, and leveraging prescription savings programs can help.
* * * * *
This is an extraordinarily complex topic. The above discussion are only meant as an introdiction to the situation. Our plans are to revisit it in the very near future.
If you have any questions or concerns about this topic, don’t hesitate to reach out to a friend, local organization or our Team for guidance.
Regards:
The Senior Power Team
K2 Kirstein & Kushnir, L.L.C.