Fong Law Group

Four Key Medicare 2025 Changes You Need to Know

Takeaways

• Updates to Medicare coverage in 2025 include higher costs for Parts A and B, a new option to pay for Part D prescription drugs on a monthly basis, and a cap on out-of-pocket costs for prescription drugs. In addition, Medicare coverage of some telehealth services will continue through March 2025.

Medicare is constantly evolving to adapt to the needs of older Americans, and several significant changes have been incorporated into the program in 2025. If you're a Medicare beneficiary — or soon will be — it’s important to understand how these changes will affect your coverage, costs, and access to services. Here's a breakdown of four important Medicare changes for 2025:

1. Higher Medicare Costs for Parts A and B

In 2025, Medicare beneficiaries can expect higher premiums for both Part A (hospital insurance) and Part B (medical insurance), following a general trend of annual increases. These increases are part of the ongoing adjustments that occur each year to keep Medicare’s funding in balance.

While the exact amounts you’ll pay may vary depending on your income and other factors, the base Part B premium for 2025 has risen to $185 per month (an increase from $174.40 per month in 2024). For many seniors, this will pose a challenge, particularly for those with fixed incomes. Premiums for Medicare Part B have been steadily increasing over the past decade, and 2025 is no exception. The rise in premiums is driven by the overall costs of health care, including prescription drugs.

The Part B annual deductible has also increased – to $257 (up from $240 in 2024).

Additionally, Part A deductibles and co-pays have increased for 2025. For instance, the Part A inpatient hospital deductible for 2025 is $1,676 (up from $1,632 in 2024). Medicare beneficiaries who need to stay in a hospital or skilled nursing facility for a period of time also may have to cover coinsurance costs, which have also gone up compared with the prior year.

2. Monthly Payments Option for Medicare Part D Prescription Drug Plans

Starting in 2025, there is another notable change in how Medicare Part D handles prescription drug coverage. Beneficiaries now have the option to spread out the cost of their Part D prescription drugs over 12 months.

This update will not reduce your total out-of-pocket costs for your prescription medications, per se. However, it does offer more predictable costs for your medications. This can be especially helpful for those who regularly rely on medications and have trouble paying for them in full when they pick them up from the pharmacy.

3. Coverage of Certain Telehealth Services Extended Through March 2025

Telehealth services have been a game-changer for many Medicare beneficiaries, particularly those in rural areas or with limited mobility.

Medicare initially offered temporary coverage for telehealth during the COVID-19 pandemic. This included virtual visits with doctors, mental health counselors, and other health care providers. The expanded access meant that beneficiaries will no longer were limited to in-person visits for many types of consultations, offering greater convenience and flexibility in managing their health care needs.

Telehealth has proven especially beneficial for managing chronic conditions, mental health services, and routine consultations that do not require an in-person visit. Beneficiaries should check with their health care providers to see if they’re offering telehealth services that are covered under Medicare.

In response to the growing demand for virtual health care, lawmakers are seeking to ensure that Medicare continues to cover telehealth services in 2025 and beyond. As of this writing, the American Relief Act of 2025 has temporarily extended certain telehealth services for Medicare enrollees through March 31, 2025. However, it is not yet clear whether all of these telehealth flexibilities will continue, as Congress will have to revisit this issue.

4. New Cap on Out-of-Pocket Costs for Prescription Drugs

In 2025, there will be a significant improvement to the way prescription drug costs are managed under Medicare. Under the Inflation Reduction Act, a cap has been introduced on out-of-pocket spending for Part D prescription drugs. This cap will limit the amount beneficiaries must pay for their medications each year to $2,000, providing much-needed relief to those who rely on costly medications.

Under the new rules, once Medicare beneficiaries hit this cap, they will not have to pay additional costs for their covered medications for the remainder of the year. This change is particularly important for those with chronic conditions or serious health issues that require expensive prescription drugs. The cap will help to make drug costs more predictable and manageable, ensuring that seniors aren’t burdened with excessive expenses related to their medications.

In 2026, Some Reduced Pricing on the Horizon

One other important change is in the works, although it will not take effect until 2026. At that time, Medicare beneficiaries will begin seeing significant savings on 10 high-cost prescription drugs. These medications, identified as some of the most expensive and commonly prescribed, made them a priority for cost reduction during pricing negotiations led by lawmakers last year.

Among these drugs are treatments for conditions such as diabetes, certain cancers, and heart disease, which often require ongoing medication.

By reducing the costs of these essential drugs, Medicare aims to improve access to necessary treatments, allowing beneficiaries to focus on their health rather than their finances.

This initiative not only provides immediate financial relief but also encourages better adherence to prescribed treatment plans. When patients can afford their medications, they are more likely to take them as directed, leading to better health outcomes overall. As these changes roll out, Medicare beneficiaries can look forward to a more sustainable approach to managing their health care costs, ultimately enhancing their quality of life.

Stay Informed

The changes to Medicare in 2025 will affect many aspects of health care for seniors. Beneficiaries should carefully review their Medicare plans during open enrollment to make sure they are taking advantage of all available benefits, and they should plan for the higher costs associated with the premium increases.

By staying informed and proactive about these changes, Medicare recipients can ensure they continue to receive the best possible care in 2025 and beyond. If you have questions about Medicare coverage, be sure to speak with your elder law attorney.

New Law Supports Home Care, Caregivers for Military Veterans

Takeaways

• Legislation signed in January 2025 seeks to secure better access to home- and community-based care for military veterans.
• The bipartisan Dole Act also focuses on coordinating assistance for family caregivers of veterans.

On January 2, 2025, President Biden signed into law the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act. The legislation represents a significant step forward in supporting the needs of veterans, their families, and their caregivers.

Named in honor of former United States Senator Elizabeth Dole, a longtime advocate for military families, the law represents a significant advancement in the services and support provided to U.S. veterans. Through the Department of Veterans Affairs (VA), this new legislation aims to enhance veterans’ access to home and community-based services (HCBS). The Act also recognizes the critical role that caregivers play in ensuring the well-being of veterans and seeks to provide them with better support and resources.

Expansion of Home and Community-Based Services

The Act requires the VA to increase access to HCBS for eligible veterans, enabling them to receive care in their own homes or communities rather than institutional settings. Before this law passed, a veteran could receive HCBS only if those services did not exceed 65 percent of the cost they would be if administered in a VA nursing home.

Under the new law, veterans can receive HCBS if the cost is equal to the cost of receiving the same care in a VA nursing home. The VA can also allow home and community-based services that exceed the cost of VA nursing home services if the VA determines that paying the higher cost is in the best interest of the veteran.

HCBS can include personal care, homemaker services, adult day health care, respite care, and other services.

Support for Caregivers

In addition, the Elizabeth Dole Act will provide enhanced training and education programs for caregivers of veterans. Such programs will seek to help them manage the unique challenges of caring for this population. The legislation also will make more veterans and their families eligible for the VA’s Program of Comprehensive Assistance for Family Caregivers.

Pilot Programs and Innovation

The law calls for the development of various pilot programs, including one focused on exploring innovative HCBS models that provide homemaker and home health care services to veterans who live in communities with a shortage of home health aides. Recognizing the importance of a skilled workforce, the Act provides funding for training programs to increase the availability of home health aides and other professionals specializing in veteran care.

Addressing Challenges for Veterans and Caregivers

Veterans often face unique health challenges, including physical disabilities, post-traumatic stress disorder (PTSD), and chronic illnesses. These conditions can make daily living tasks difficult, increasing reliance on caregivers. For many veterans, caregivers are loved ones who often sacrifice their own well-being and financial stability to provide care. By strengthening HCBS and caregiver support, the Elizabeth Dole Act addresses both veteran-specific health needs and the burdens placed on caregivers.

Other Benefits of the Legislation

The law’s emphasis on home-based care aligns with veterans’ preferences to age in place and maintain their independence. By reducing the reliance on institutional care, the legislation also has the potential to lower overall health care costs. Furthermore, the Act’s focus on caregiver support may help improve the mental and physical health of those providing care, ultimately benefiting veterans by ensuring consistent and high-quality assistance.

“The Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act will better support veterans, caregivers, and survivors by improving access to VA health care and benefits, expanding long-term care programs, strengthening programs for student veterans and military family members, and more,” said U.S. Senator Jerry Moran, a sponsor of the bill.

Learn More About Benefits for Veterans

Many benefits are available for veterans, although navigating the different benefit systems can be confusing. Your elder law attorney can guide you through available options and ensure you receive the benefits to which you are entitled.

Medicare Open Enrollment - and New Benefits - Are on the Way

Medicare open enrollment is on the horizon. Now is the time to start thinking about any changes you may want to make to your Medicare coverage. Thanks to the Inflation Reduction Act, some significant changes have come along for Medicare, and more will take effect in the near future.

Medicare Open Enrollment

Medicare open enrollment happens once each year. In 2024, the open enrollment period is between October 15 and December 7. Any changes to your Medicare plans will take effect on January 1, 2025. During the open enrollment period, you can:

• Join or drop a Medicare Advantage Plan, switch between Medicare Advantage Plans, or add or drop Medicare prescription coverage.
• Switch from Original Medicare to a Medicare Advantage Plan or vice versa.
• Join or drop a Medicare prescription drug plan, or switch to a different drug plan if you are enrolled in Original Medicare.

If you are already in a Medicare Advantage Plan, you will also have an open enrollment period between January 1 and March 31 of 2025, during which you can:

• switch to another Medicare Advantage Plan (with or without drug coverage);
• drop your Medicare Advantage Plan and return to Original Medicare; or
• join a separate Medicare drug plan.

Learn more about Medicare enrollment periods and how to join the various plans.

Lower Drug Prices for Medicare Members

One of the most significant changes Medicare beneficiaries will see in the coming years is the lowering of prescription drug prices. Under the Inflation Reduction Act (IRA), the federal government was granted the authority to negotiate the prices of certain high-cost medications covered under Medicare. This historic move is designed to reduce out-of-pocket expenses for beneficiaries and lower costs for the Medicare system.

In 2026, the first round of negotiated prices will take effect, affecting the cost of 10 widely used prescription drugs. These drugs were chosen because of their high cost, they are each available only from single sources, and there are no generic or biosimilar competitors.

The following chart outlines the initial 10 drugs that will be affected by the lower negotiated prices. The prices in the chart are rounded and represent estimates of the Wholesale Acquisition Costs (WACs) based on a 30-day supply in calendar year 2022.

The manufacturers of the drugs are participating in the Negotiation Program voluntarily. The below information is subject to change. Learn more on the Centers for Medicare & Medicaid Services (CMS) website.

Negotiated Prices for 10 Medicare Drugs (going into effect in 2026)

Drug Name	Commonly Treated Condition	List Price for 30-Day Supply in 2023	Discount of Negotiated Price From 2023 List Price	Agreed-to Negotiated Price for 30-Day Supply for 2026
Januvia	Diabetes	$527	79%	$113
Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, NovoLog PenFill	Diabetes	$495	76%	$119
Farxiga	Diabetes, Heart failure, Chronic kidney disease	$556	68%	$178.50
Enbrel	Rheumatoid arthritis, Psoriasis, Psoriatic arthritis	$7,106	67%	$2,355
Jardiance	Diabetes, Heart Failure, Chronic kidney disease	$573	66%	$197
Stelara	Psoriasis, Psoriatic arthritis, Crohn’s disease, Ulcerative colitis	$13,836	66%	$4,695
Xarelto	Prevention and treatment of blood clots, Reduction of risk for patients with coronary or peripheral artery disease	$517	62%	$197
Eliquis	Prevention and treatment of blood clots	$521	56%	$231
Entresto	Heart failure	$628	53%	$295
Imbruvia	Blood cancers	$14,934	38%	$9,319

If you take any of these 10 drugs, you will want to monitor developments closely. Keep in mind the lower prices will not take effect until 2026. Planning ahead can help you anticipate future savings and make informed decisions during the 2025 open enrollment period.

In addition to the 10 drugs listed above, the CMS will pick 15 more drugs by February 1, 2025, that are covered under Medicare Part D to negotiate lower prices for starting in 2027. For 2028, CMS will negotiate lower prices for 15 more drugs that are covered by Medicare Part B and Part D. Up to 20 more Part B and Part D drugs will be chosen for lower negotiated prices each year after 2028.

Americans Are Still Paying More for Medications

Even with these discounts, Americans are still paying more for brand-name prescription medications than people in most other countries. According to The Commonwealth Fund, Americans’ per capita spending on pharmaceuticals is nearly three times the average of citizens of other Organisation for Economic Co-operation and Development (OECD) nations.

A 2022 study published by JAMA found that about a fifth of U.S. adults over the age of 65 were trying to reduce their prescription drug costs by skipping or delaying filling their prescriptions, reducing or skipping doses, or using another person’s medication. Some survey respondents said they had to forgo basic needs or start accruing debt so they could afford their medications. Such desperate measures can have serious consequences for people with chronic health conditions.

More Changes Coming to Medicare

The IRA offers additional changes that will help Medicare beneficiaries on other fronts as well.

• Medicare beneficiaries will have a yearly cap on how much they will have to spend on out-of-pocket prescription drugs covered by Medicare. The cap for 2025 is to be set at $2,000.
• Insulin costs are capped at $35 per month per covered prescription for those who are enrolled in Medicare Part D. This cap may not apply to all insulin products. Check with your care provider to determine whether this applies to you.
• Recommended vaccines will be available at no cost to people who have Medicare prescription drug coverage.
• The Medicare Part D low-income subsidy program (LIS), also known as Extra Help, has been expanded to 150 percent of the federal poverty level (FPL). If your annual income is 150 percent of the FPL, then you may qualify for the Extra Help program.
• Companies that raise the prices of certain drugs faster than the rate of inflation must pay a rebate to Medicare.

Learn More About Medicare and Late-Life Planning

As is typical of health insurance and health care, Medicare and its related plans have nuances. Speak with a health care professional or your elder law attorney. They can discuss your specific situation and potential options with you.

What You Should Know About the Medicare Tax

You may have seen the Medicare tax listed on your paycheck stubs or on your income tax return filings and wondered what it is. To learn more about what it is and what it pays for, continue reading.

What Is Medicare Tax?

Medicare is a federal public benefits program providing medical benefits to individuals over 65 and younger people with certain disabilities.

Medicare tax is an essential component of the United States tax system. As part of the Federal Insurance Contributions Act (FICA), this tax plays a crucial role in maintaining the solvency and functionality of the Medicare program.

The tax was established in 1965 as part of the broader Medicare program created under the Social Security Act. Its primary purpose is to fund Medicare Part A, which covers hospital insurance. This coverage includes inpatient hospital care, skilled nursing facility care, hospice care, and some home health care services.

Other parts of Medicare, such as Part B (medical insurance) and Part D (prescription drug coverage) are funded through premiums paid by beneficiaries and general revenue. Part A, meanwhile, gets its funding primarily through payroll taxes.

How Medicare Tax is Calculated

Medicare tax is calculated as a percentage of an employee's wages. As of 2024, the Medicare tax rate is 1.45 percent for both employees and employers, making the total rate 2.9 percent for most workers. This means that an employee pays 1.45 percent of their wages to the Medicare program. The employer then matches this amount.

However, an additional Medicare tax applies for high-income earners. Under the Affordable Care Act (ACA), individuals with wages exceeding certain thresholds pay an extra 0.9 percent Medicare tax. The thresholds are as follows:

• $200,000 for single filers
• $250,000 for married couples filing jointly
• $125,000 for married individuals filing separately

This additional tax is only imposed on the employee's portion of the Medicare tax and not on the employer's portion.

Who Pays Medicare Tax?

Medicare tax is mandatory for nearly all workers and employers in the United States. This includes:

• Employees: Most workers have Medicare tax withheld from their paychecks automatically. This includes part-time, full-time, and temporary workers.
• Employers: Employers must match the Medicare tax contributions of their employees.
• Self-employed individuals: Self-employed individuals must pay both the employer and employee portions of Medicare tax, totaling 2.9 percent of their net earnings. For high-income self-employed earners, the additional 0.9 percent tax also applies.

Certain groups are exempt from paying this tax, such as some religious groups and foreign workers who are not considered residents for tax purposes. Additionally, specific types of employment may be exempt from Medicare tax under certain conditions.

Broader Implications of Medicare Tax

For employees, Medicare tax is a non-negotiable deduction from their gross income. This is one of the factors that contributes to the difference between gross and net pay. With the additional 0.9 percent tax for high earners, these workers also face a slightly higher overall tax burden.

For employers, Medicare tax represents a direct cost of hiring workers. In addition to wages, employers must account for the 1.45 percent Medicare tax contribution per employee. This adds to the overall cost of employment. In turn, this can influence hiring decisions, wage levels, and the ability to offer benefits.

Self-employed individuals bear a unique burden in covering both the employee and employer portions of the Medicare tax. This can represent a significant expense, particularly for high earners who also face the additional 0.9 percent tax. To mitigate this, self-employed individuals can deduct the employer-equivalent portion of their Medicare tax when calculating their adjusted gross income.

Medicare tax helps ensure a steady stream of funding for Medicare Part A, keeping the program stable and predictable. However, the tax can also influence labor market dynamics. For instance, higher payroll taxes can be a disincentive for hiring, particularly for small businesses and start-ups with tighter budgets.

Conversely, the benefits Medicare provides can have positive economic effects. In addition to improving public health, Medicare can reduce health care-related financial distress among seniors.

Medicare tax is a subject of ongoing policy debate. Proposals to modify Medicare tax rates or thresholds are common, particularly in discussions about health care funding and tax reform. Advocates for increasing the tax often argue that higher rates are necessary to address the long-term financial challenges facing the Medicare program, especially as the population ages and health care costs rise. Opponents, however, caution that higher payroll taxes could negatively affect economic growth and job creation.

Future Outlook

The future of Medicare tax ties closely to broader discussions about health care reform and the fiscal sustainability of the Medicare program. As the U.S. population ages, the number of Medicare beneficiaries is expected to increase significantly, putting additional strain on the system. Ensuring that Medicare remains adequately funded without placing undue burden on workers and employers is a complex challenge that lawmakers will continue to face.

Potential reforms may include adjustments to the tax rate, changes to the income thresholds for the additional Medicare tax, or broader restructuring of how Medicare is funded. Public opinion and political considerations will play critical roles in shaping these decisions.

More Information

Medicare tax is a vital part of the United States’ approach to funding health care for millions of Americans. Understanding it more fully helps clarify why this tax is essential not only for current Medicare recipients, but also for the future stability of the Medicare program. As the nation grapples with the challenges of an aging population and rising health care costs, the role of this tax in funding sustainable, accessible health care will remain a pivotal issue in public policy and economic discourse.

Contact your elder law attorney today to talk further about Medicare, Medicaid, and other ways to pay for health care. They can walk you through the options that may be available to you and help you understand the benefits and costs of different approaches.

Feds Simplify and Clarify Various Medicaid Rules for States

Thanks to a new rule recently finalized by the federal government, obtaining and renewing health care coverage under the Medicaid program is set to become easier for millions of Americans.

What Is Medicaid?

Medicaid provides people living on limited income with access to health care services. Enrollees must meet strict financial guidelines to qualify. In most states, you must have $2,000 or less in assets to your name to be eligible for Medicaid.

As a joint federal-state program, Medicaid allows states to set their own eligibility criteria and service coverage guidelines, so programs – as well as the criteria to qualify for them – tend to vary across states.

Policy Changes

In April 2024, the Centers for Medicare and Medicaid Services (CMS) officially published the second part of its new two-part rule.

The new rule seeks to standardize some of the application and renewal processes that Medicaid enrollees will follow, regardless of the state in which they live. As part of an effort to make documentation policies more consistent across states, it also updates language about electronic recordkeeping for state agencies, which has not seen revisions since the late 1980s.

Several of the new changes are of specific interest to Medicaid enrollees aged 65 and older and those who are living with a disability.

Among its provisions are the following points related to Medicaid:

• Enrollees who are aged 65 and older or living with a disability will no longer have to appear in person for their renewal interviews.
• Medicaid recipients seeking to renew their coverage will have 30 days to return any necessary documentation to their state Medicaid agency.
• Medicaid recipients will not have to go through the renewal process more than once every 12 months (with certain exceptions).
• First-time Medicaid applicants will have at least 15 calendar days to provide any additional information requested to complete their application. The state will have, at most, 45 calendar days to determine an applicant’s eligibility.
• State Medicaid agencies must take steps to update contact information for an enrollee who may have moved before they pursue termination of that person’s coverage.
• The CMS is also extending the re-enrollment timeline for people who lost their Medicaid coverage during the unwinding period following the end of the COVID-19 public health emergency. The deadline to re-enroll is shifting from July 31, 2024, to November 30, 2024.

Other updates include streamlining the amount of information applicants need to submit and requiring state agencies to accept renewals via snail mail and phone as well as online or in person. These changes will begin to take effect in June 2024. Estimates suggest that the new rule will result in boosting Medicaid enrollment by 1.33 million people by the year 2028.

“Our North Star is ensuring that everyone who is eligible for coverage can enroll and keep that coverage,” CMS Administrator Chiquita Brooks-LaSure said in a news release. “Our work must start and end by breaking down barriers that prevent eligible people from connecting to coverage.”

For more information about this historic rule, access the fact sheet from CMS.

Connect With an Elder Law Attorney

Understanding the ins and outs of Medicaid can be overwhelming. For guidance on applying or qualifying for Medicaid in your state, be sure to work with your elder law attorney. 

Proposed Medicare Bill to Help Seniors With Medical Costs

In the ever-evolving landscape of health care, one critical challenge has been ensuring that Medicare recipients receive the coverage they need without undue financial burdens. A new legislative effort aims to address a particularly perplexing issue: the distinction between hospital observation status and inpatient status, and its effects on Medicare coverage.

Understanding Observation Status

Observation status is a classification hospitals use to determine the billing for Medicare patients. When a patient is under observation, the hospital technically considers them outpatients. (This is the case even though the patient may stay overnight or for several days in a hospital bed and receive similar care to that of an inpatient.) An inpatient is someone who has been formally admitted to the hospital.

Characteristics of Observation Status

• Temporary and Evaluative: Observation status is generally intended for patients who need short-term monitoring or further testing to determine if they should be admitted as an inpatient or if they can be discharged.
• Billing Implications: Since observation status is classified as outpatient care, patients may face higher out-of-pocket costs compared to inpatient stays, especially if they need to transition to a skilled nursing facility for further care.
• Clinical and Financial Effects: Observation status can affect clinical decisions and financial burdens for patients, as it often leads to confusion and unexpected expenses due to its distinction from inpatient care.

Challenges With Observation Status

The main challenge with observation status lies in its effect on Medicare coverage. Under current Medicare rules, time spent under observation does not count toward the three-day inpatient stay requirement for skilled nursing facility (SNF) coverage. This can lead to significant out-of-pocket costs for patients who need skilled nursing care after leaving the hospital but who did not meet the inpatient criteria.

“When seniors require hospitalization, their focus should be on their health and getting well, not on how they were admitted,” Sen. Susan Collins (R-ME), a co-sponsor of the bill, said in a news release. “Yet currently, many older Americans face severe financial consequences due to the distinction between an observation stay and inpatient admittance.”

Medicare’s Three-Day Stay Rule

Medicare’s three-day stay rule is a policy that requires a patient to have a minimum of a three-day inpatient hospital stay to qualify for Medicare Part A coverage of SNF care. This rule has significant implications for patients and their access to necessary post-acute care services.

Details of the Three-Day Stay Rule

• Inpatient Requirement: To be eligible for coverage of SNF care under Medicare Part A, you must have been an inpatient for at least three consecutive days.
• Exclusion of Observation Days: Days spent under observation status, even if in the hospital, do not count toward this three-day requirement. This can potentially disqualify patients from SNF coverage despite having spent time in the hospital.
• Financial Consequences: Patients who do not meet the three-day inpatient requirement may face substantial costs for SNF care. This can be financially burdensome and limit access to necessary rehabilitative services.

The Effect on Patients

The three-day stay rule can create a significant barrier for patients who require SNF care after a hospital stay. Many patients who have been under observation status might not meet the inpatient criteria. As a result, they may fail to qualify for Medicare coverage of subsequent skilled nursing care. This often leads to out-of-pocket expenses that can be challenging for many, particularly older adults on fixed incomes.

The Improving Access to Medicare Coverage Act

The Improving Access to Medicare Coverage Act is a bipartisan legislative proposal introduced to amend a critical shortcoming in Medicare coverage related to hospital stays. The primary goal of the bill is to ensure that time spent under observation status in a hospital counts toward the necessary days for Medicare coverage of subsequent SNF care.

Key Provisions

• Observation Status Inclusion: The Act proposes that observation status counts toward the three-day hospital stay requirement for Medicare coverage of SNF care.

• Patient Protection: By addressing the observation status issue, the Act aims to protect patients from unexpected high costs associated with not meeting the inpatient requirement for Medicare Part A coverage of SNF care.

• Improved Coverage and Access: The Act seeks to ensure that Medicare recipients have better access to necessary post-acute care services without the financial strain caused by the current policy limitations.

The introduction of this Act highlights the need for a more equitable system that recognizes the reality of hospital care, where observation status can often involve the same level of care and duration as inpatient status.

How the Act Addresses the Issues

The Improving Access to Medicare Coverage Act aims to rectify the disparities caused by the current policy by including observation status in the calculation of the three-day hospital stay. This change is intended to:

• Enhance Equity: By counting observation days toward the three-day requirement, the bill would provide a more equitable system that acknowledges the reality of patient care needs.

• Reduce Financial Burden: The Act would alleviate the unexpected costs associated with the current exclusion of observation status, making post-acute care more affordable for Medicare beneficiaries.
• Improve Access to Care: Ensuring that more patients qualify for Medicare-covered SNF care would improve access to necessary rehabilitative services, promoting better health outcomes and quality of life for older adults.

“This bipartisan bill would deem time spent in observation status as inpatient care for the purpose of the Medicare three-day prior hospital stay requirement for skilled nursing care, which will help insulate older Americans from undue out-of-pocket costs and ensure that they get the care that they need,” said Sen. Collins.

The Improving Access to Medicare Coverage Act represents a significant step toward addressing the complexities and inequities of Medicare coverage related to hospital stays. By including observation status in the calculation of the three-day inpatient requirement, the Act seeks to ensure that patients receive the care they need without facing unnecessary financial burdens. This legislative effort underscores the importance of continually assessing and updating health care policies to meet the needs of the population and to provide fair, comprehensive access to essential health services.

Learn More About Medicare

You can learn more about Medicare benefits and your rights by contacting your elder law attorney today. They can discuss your specific situation and your options with you.

Understanding Medicaid: What Does Medicaid Cover?

In the complex and frequently changing landscape of health care in the United States, Medicaid stands out as a vital program. Since 1965, it has provided essential coverage to millions of low-income individuals and families. Alongside Medicare, Medicaid serves as a lifeline for those who may otherwise struggle to afford health care services.

Though Medicaid exists to help those who need it, navigating the specifics of what it covers and does not cover can be daunting. This article highlights the basics of Medicaid coverage, shedding light on its benefits and limitations.

The Basics of Medicaid

Medicaid offers health care coverage to individuals and families with limited income and relatively few assets. The program provides a wide range of medical services, including doctor visits, hospital stays, prescription drugs, and preventive care. Medicaid is a joint federal and state program, so each state has the flexibility to administer the program differently within broad federal guidelines.

The eligibility criteria for Medicaid benefits can therefore vary from state to state. Generally, they relate to factors such as income, household size, disability status, and age. Some groups, such as children and pregnant women, may qualify based solely on income. Others, such as seniors and people with disabilities, may need to meet additional criteria.

Services covered by Medicaid also vary from state to state. Each state is required by federal law to provide Medicaid’s mandatory benefits. However, you cannot necessarily assume your state will cover the specific medical care you need.

The following benefits are provided as a guideline. Partner with a professional with expertise in your state’s Medicaid rules to ensure you get the most suitable coverage.

What Medicaid May Cover in Your State

Doctor Visits and Preventive Care

Medicaid should cover visits to primary care physicians, specialists, and other health care providers for preventive services. This may include vaccinations, screenings, and wellness exams.

Hospital Services

Medicaid coverage for inpatient and outpatient hospital care may include emergency room visits, surgeries, and medically necessary treatments.

Transportation to Medical Care

Medicaid generally covers the costs of emergency and non-emergency transportation to and from medical appointments and services that are covered by Medicaid.

Prescription Drugs

Medicaid provides coverage for a wide range of prescription medications deemed medically necessary by health care providers. However, coverage may vary depending on your state's specific guidelines.

Laboratory and Diagnostic Services

Medicaid may cover laboratory tests, diagnostic imaging, and other medical tests necessary for diagnosis and treatment.

Maternity and Newborn Care

Pregnant women enrolled in Medicaid receive comprehensive prenatal, delivery, and postpartum care, as well as coverage for newborn care.

Mental Health and Substance Abuse Services

Mental health services may be eligible for Medicaid coverage. These may include counseling, therapy, and psychiatric care, as well as treatment for substance abuse disorders.

Long-Term Care

Medicaid provides coverage for long-term care services. This includes care in nursing facilities and home health services for eligible individuals who require assistance with daily activities. Individuals may qualify for these services because of age, disability, or chronic illness.

Dental and Vision Care

Coverage for dental and vision services varies by state. Medicaid often includes preventive and basic dental care for children and limited coverage for adults. Vision care may include exams and eyeglasses for children.

What Does Medicaid Not Cover?

Cosmetic Procedures

Medicaid typically does not cover elective cosmetic procedures or treatments that are considered purely cosmetic in nature and not medically necessary.

Experimental or Investigational Treatments

Medicaid does not cover experimental or investigational treatments that have not been proven effective or approved by regulatory agencies.

Certain Types of Care

Though Medicaid covers a wide range of services, there are limitations on certain types of care, such as infertility treatments, elective abortions, and some types of alternative medicine. For example, the federal government lists family planning as a mandatory service benefit, but states interpret this differently.

Non-Emergency Medical Transportation

Though some states offer limited transportation assistance for medical appointments, Medicaid may not cover non-emergency transportation to health care facilities.

Out-of-Network Providers

Medicaid typically requires beneficiaries to receive care from providers within the program's network. Out-of-network care may not be covered except in emergency situations or with prior authorization.

Certain Prescription Drugs

Though Medicaid covers a broad range of prescription medications, coverage may be limited for certain drugs, particularly brand-name medications.

Routine Foot Care

Medicaid often does not cover routine foot care unless it is medically necessary. For example, treatments such as nail trimming, callus removal, or orthopedic shoes may be covered only for Medicaid beneficiaries with a specific condition, such as diabetes.

Seek Expert Advice on Medicaid

Medicaid plays a crucial role in ensuring access to health care for millions of vulnerable individuals and families nationwide. By covering a wide range of essential medical services, Medicaid helps improve the health of eligible beneficiaries. It also alleviates financial burdens for people with low income who may otherwise struggle to afford care.

Though Medicaid covers many services, exclusions and limitations could result in unexpected costs or denials of coverage. Be sure you understand the scope and limitations of Medicaid coverage in your state so you can make informed decisions about your health care needs and costs.

Contact your elder law attorney today to talk further about Medicaid. They can walk you through the benefits that may be available to you and help you understand how you can qualify for coverage.

Medicaid Spend Down: Pay for More Than Just Medical Bills

Since the 1960s, Medicaid has provided health care coverage for low-income people across the United States. For millions of seniors, Medicaid offers financial assistance, helping them to cover the cost of long-term care services. Today, this joint federal-state program also benefits other qualifying populations with limited income, including children and people with disabilities.

Qualifying for Medicaid

You may not foresee yourself applying for Medicaid in the future. Yet in reality, research shows that roughly one in seven seniors are likely to require long-term care at some point later in life. Long-term care can be extremely costly; this is why many people have come to rely on the Medicaid benefits that cover these costs.

Given these sobering statistics, consider gaining a better understanding of Medicaid and shaping your plans sooner rather than later. To qualify for Medicaid, you may need to carry out certain actions at least five years prior to when you apply. That's because most state Medicaid agencies will look back at the five years leading up to when you submit your application for the program.

If you happened to make certain purchases or gifts during this so-called “lookback” period, you could end up facing a penalty. Unfortunately, these penalties could mean you have to wait months, or even years, before you become eligible for Medicaid.

Medicaid is for people living on limited incomes. So, among the main criteria to qualify for Medicaid is that you have limited income and assets. Generally, you must have no more than $2,000 in your name to be eligible for this public benefits program. (Note that this limit can vary according to state, however.)

If you have more than that, you may find yourself having to “spend down” your extra assets to meet the $2,000 limit. Only after you have fulfilled this (and other) requirements would Medicaid begin paying for basic long-term care expenses.

The upside, however, is that not all your assets count against you in the eyes of Medicaid. For example, your primary home is typically exempt. You also can own one car without worrying about exceeding Medicaid’s asset limits. And, depending on your state, you may be able to spend your excess money on certain items that help make your life more comfortable.

Medicaid Spend Down

As mentioned above, each state dictates what the income and asset limits are for Medicaid applicants. These figures also tend to shift a bit every year. 

Take note that not every state allows for a Medicaid spend down. These so-called “income cap” states follow different rules.

Also, take care that items you do decide to buy as part of your spend down are specifically for the Medicaid applicant.

So, What Can You Pay For?

All that said, Medicaid applicants can generally spend down their excess income in several ways. Paying off credit card debt or medical bills is one possibility. Prepaying for your funeral services is often a legitimate spend down option, too. Admittedly, these sorts of payments might not bring you much enjoyment, but they still may be able to count toward your spend down amount.

In many cases, you can spend down your surplus assets on medical services, equipment, or health insurance premiums.

Perhaps you have come to rely on a wheelchair or cane or could benefit from hearing aids. You may want to have an eye doctor check your vision. If your prescription eyeglasses are out of date, you may be able to purchase a new pair. These are all medical expenses that could potentially be part of your spend down efforts.

At the same time, your excess income can go toward much more than unpaid medical debt or other bills. Purchases that help improve your quality of life tend to be permissible. Here are five tangible types of items you may be surprised to find you can legally purchase as part of your Medicaid spend down:

• A new vehicle – You may need a reliable car or a wheelchair accessible vehicle to get to medical appointments. Keep in mind that some states place a limit on the value of your one vehicle. For example, you might not want to plan on purchasing an RV camper for road trips if you are seeking Medicaid assistance.
• Electronics – In some states, upgrades to your smartphone, laptop, television set, or another communications device may be a possibility.
• New clothes – It might be an ideal time for you to stock up on new socks, pajamas, or other clothing necessities.
• Books or subscriptions – Sources of entertainment can boost your quality of life, too. You may prefer books or magazines, or subscriptions to streaming services like Netflix.
• Towels and bedding – Check with a professional to see whether you can refresh your bedding or towel supply as part of your spend down. If moving to a long-term care facility, ask whether they provide these types of items for you.
• Furniture – You may be moving to a facility that allows you to bring along certain preapproved furnishings. For example, you might benefit from a recliner chair with a power lift in your new space.
• Home improvement – Even if you'll receive long-term care at home, you might be able to spend your excess income on modifying your residence. Maybe you need to invest in fixing your plumbing, paving your driveway, or installing a wheelchair ramp.

Consult with your attorney to understand what is and is not permissible. (A bonus is that you may in fact be able to include legal fees as part of your spend down process.)

Why It’s Key to Work With Your Elder Law Attorney

The rules regarding Medicaid get complicated quickly. Be sure to talk to your elder law attorney about Medicaid planning. Discuss your needs with them and ask what your options might be for spending down your assets. They can identify strategies to help preserve your hard-earned savings while avoiding potential Medicaid penalties.

Whatever you do choose to purchase, keep all your receipts and detailed documentation in case any questions come up. You don’t want to break the rules by accident and end up facing a Medicaid penalty period.

Pay Monthly for Medicare Part D Prescriptions Come 2025

What Is Medicare Part D?

Adults who are age 65 and older can enroll in Medicare, a federal health insurance program. If you have signed up for Medicare Part A, Part B, or both, you can also sign up for Part D.

Available through private insurers, Medicare Part D remains optional and covers certain categories of prescription medications. When choosing a Part D plan, review the specific drugs that each plan covers. You may already rely on a particular prescription medication or medications. Take the time to determine whether it appears on the list of drugs covered by any plans you are considering.

To get a better understanding of the wealth of options available for Medicare coverage, be sure to visit the Medicare website.

What Is the Medicare Prescription Payment Plan?

In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced that a new Medicare Prescription Payment Plan will start in 2025. Under this plan, all Medicare prescription drug plans, including Medicare Advantage plans, will now offer enrollees the option to spread out their prescription drug out-of-pocket costs over 12 months.

How Will It Work?

You may have high prescription costs; about one-third of seniors today in fact have trouble affording their medications. Meanwhile, about one in five say they have chosen to skip dosages from time to time to make their high-cost prescriptions last longer.

If you normally pay at the pharmacy at the time you pick up your prescription, you will have another option under the new plan. Come 2025, you can opt to be billed for and pay these costs (capped at a certain amount) over time through your insurer. This is meant to make prescription drugs more accessible and manageable for those who need them most. It will not, however, change the prescription costs.

Starting in 2025, Part D enrollees may opt into the program by contacting their Part D sponsor and completing the Medicare Prescription Payment Plan election process. This is true regardless of whether you have a traditional or Medicare Advantage plan.

What Happens Next?

After enrolling in the plan, your sponsor will notify any pharmacy that fills a prescription of your status, and you will not pay anything at the register. Instead, you will be billed the cost in monthly installments by your plan sponsor.

If you do not pay the billed amount, your participation in the program may be terminated. However, you cannot be terminated from the Part D plan for failing to pay for your prescriptions. In addition, CMS guidance states the sponsor must do the following:

• issue notices for missed payments,
• give a grace period of at least two months for failure to pay the billed amount, and
• create a reinstatement process to allow those enrolled to get back into the program if they can show good cause for failing to make payments.

The Plan May Not Be Right For You

If affording your medication is a hardship and spreading out payments over 12 months would not provide enough reprieve, a more appropriate option may be one of the four Medicare Savings Programs or the Medicare Part D Low Income Subsidy known as Extra Help. Not everyone is eligible for these programs, however, and you must apply for these options.

While the Medicare Prescription Payment Plan may be good news for many, it may not be right for everyone, such as those with low out-of-pocket prescription costs. It is expected that feedback from the public and other interested parties will add some further changes to the proposed Medicare Prescription Payment Plan to help as many people as possible.

Additional Resources

To learn more about Medicare, including your payment options, be sure to consult with your elder law attorney.

Medicare Benefits 2024: 5 Positive Changes for Seniors

More than 65 million seniors across the country benefit from Medicare, a government health insurance program.

When Does Medicare Start?

At age 65, you become eligible for Medicare if you are a U.S. citizen. You do not have to wait until you retire to apply for the program.

You can enroll in Medicare beginning three months prior to your 65th birthday. You can also do so during the month of your 65th birthday or during the three months that follow. 

Can I Get Medicare at Age 62?

Certain individuals may be able to secure Medicare coverage earlier than age 65. For instance, if you have end-stage renal disease, ALS, or a disability, it’s possible you could qualify.

What Are the Different Parts of Medicare?

Medicare's four main parts cover different aspects of health care:

• Part A covers institutional care in hospitals and skilled nursing facilities. Part B pays for doctor visits and preventative care. This includes routine lab tests and certain outpatient treatments. Parts A and B serve as the so-called "traditional" parts of Medicare.
• You can choose to enroll in the alternative to traditional Medicare, Medicare Part C, or Medicare Advantage. Part C plans bundle Parts A and B (and sometimes Part D) with other benefits, such as dental or vision care.
• Medicare Part D coverage, which is often optional, covers many of your prescription medications.

Medicare Updates for 2024

Although 2024 Medicare premiums are seeing an increase, there are nevertheless a few bright spots.

Starting on January 1, 2024, Medicare enrollees may be pleased to hear about several positive changes taking place. These include the following five updates:

1. Medicare’s mental health coverage is expanding.

• If you need a licensed mental health provider, you will be more likely to able to find a professional near you who accepts Medicare. About 400,000 more of these providers added nationwide by Medicare will include marriage and family therapists as well as mental health counselors.

• Medicare can now help if you require treatment for alcohol abuse or substance use disorder. Older Americans are currently suffering from a substance abuse epidemic. In 2022, roughly 4 million seniors aged 65 and older were living with an addiction. Covered treatments will now include such services as psychotherapy, prescription drugs, and screenings.

• Medicare will now cover up to 19 hours per week for intensive outpatient mental health care for qualifying patients. This includes enrollees who are struggling with serious mental health illnesses or substance abuse.

2. Up to 3 million more people could qualify for extra help paying their Medicare Part D premiums.

As of the start of 2024, the Medicare Extra Help Program will strive to boost its number of enrollees through various outreach efforts. Extra Help assists low-income seniors and people with disabilities. However, many who are eligible do not currently participate in the program, sometimes because they remain unaware of its existence.

In addition, another 300,000 individuals who already are part of the program will see their benefits expand further. They'll see their out-of-pocket costs for their prescription medications drop by an average of $300 a year. These enrollees also will not have to pay a premium or deductible.

3. If your specialty medications are particularly pricey, you will see considerable savings in 2024.

Many people rely on certain expensive medications to treat such serious health conditions as cancer. Even with Medicare Part D, they may have no choice but to pay tens of thousands of dollars out of pocket each year for them.

If your prescription drugs covered by Medicare cost you more than $8,000 out of pocket, you will not be responsible for any other co-pays or coinsurance for the remainder of the calendar year. This is because Medicare Part D enrollees, as of 2024, will no longer have to pay a 5 percent co-pay for catastrophic coverage.

Note that if you rely solely on brand-name prescription medications, you will end up spending roughly $3,300 out of pocket to avoid the 5 percent co-pay. (Even better, come 2025, Part D enrollees will not pay more than $2,000 out of pocket for their prescription drugs in any given year.)

4. You’ll pay no more than $35 a month for insulin supplies covered by Medicare Part D.

As part of the Inflation Reduction Act, price cuts on insulin became effective on January 1, 2024. Medicare Part D plans therefore cannot charge enrollees more than $35 per month for insulin included in their plan. Part D deductibles for insulin supplies will no longer apply, either.

The cost of this medication has tripled over the past decade or so. Even for people who require insulin daily, many are still unable to afford it. In 2022, more than a million individuals with diabetes chose to ration their insulin supply because of the cost, according to one report.

5. If you suffer from chronic pain, Medicare will now cover your monthly services.

For the first time, people receiving Medicare who have persistent or recurring pain lasting longer than three months now can have such services has medication management and pain assessment covered by their plan. (You will still need to pay for your Medicare Part B deductible and coinsurance.)

Work With Your Attorney

If you need assistance navigating Medicare, reach out to your elder law attorney today. They can help you understand how to apply for or qualify for Medicare benefits.