Your health care costs today

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An expert shares 10 things you should know about your health costs right now. Read the full article on Health Lab.

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Medicare & Medigap

• Switching Medicare Advantage Plans
• Medicare Advantage to traditional Medicare
• Special Enrollment Periods
• Medigap Open Enrollment Period
• Medicare Prescription Payment Plan
• "Extra Help" Medicare Program
• Navigating Medicare: State Health Insurance Assistance Program

Healthcare.gov

• Marketplace by State
• Find out if you can get health coverage now
• Preventive Health Services
• Understanding HSA-eligible plans

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• How to get help with medical bills
• Find and contact elected officials

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• Eligibility for Care
• PACT Act
• Community Care Outside the VA

Article

• A freeze, or a fix? Preventive care coverage at a crossroads

Transcript

Host:

Welcome to Health Lab, your destination for news and stories about the future of healthcare. Today: Your health care costs today; A list of the top 10 things to know about your health costs right now.

2025 has brought change, with more potentially on the horizon. A note here that this information was first published on Health Lab in early February 2025, and updated to reflect changes as of mid-March 2025.

When it comes to health insurance, prescription drugs and other health costs, January 2025 was not a boring month.

The new year brought a new Congress, several executive orders from a new president, many new people serving in statehouses, and new laws going into effect.

When it comes to the cost of prescription drugs, doctor’s appointments, hospitalizations, scans and blood tests, there’s a lot that could still change. And there’s a lot that you might not realize has changed already.

There’s also misinformation running around social media about changes that haven’t actually happened.

Mark Fendrick, M.D., a University of Michigan Medical School professor and director of the U-M Center for Value-Based Insurance Design, says that, “While the players on the field have changed, it’s important for everyday Americans to realize that they can be proactive to make sure they’re getting the most out of the dollars they spend on their health.”

What follows are Dr. Fendrick’s top 10 things to know about your health costs right now, and resources for more information. All of the resources mentioned in this episode will also be linked in the show notes.

1. If you have Medicare prescription coverage, your out-of-pocket drug costs will be capped at $2,000.

As part of a law passed in 2022 that took effect this year, Medicare beneficiaries have a ceiling of $2,000 per year on the amount they have to pay for medications that are covered by their Part D drug plan. 

This is good news, says Dr. Fendrick, because his research and other studies have shown that people often make decisions about filling prescriptions and taking medicine on schedule that are driven by how much it costs.

Previous research by another U-M team showed that a higher cap that took effect last year saved thousands of dollars for people receiving cancer treatment, and the new cap will affect even more people.

Another new program, the Medicare Prescription Payment Program, can help any person with Medicare drug coverage manage their costs throughout the year by spreading them out evenly, though it’s important to note that it doesn’t reduce total costs. 

2. If you have Medicare and a low income, you may qualify for even lower drug costs 

Many people don’t know about the Extra Help program for people with lower incomes, which can actually bring out-of-pocket drug costs down to about $5 for generic medications and about $12 for many brand name medicines. 

People with Medicare who qualify for Medicaid or Social Security disability (SSI) automatically get enrolled, but other people with lower incomes and low assets can also qualify; but they have to take action to enroll. 

3. Right now, you can still get vaccines, cancer screenings and other preventive care without paying anything. But that could change this year.

For more than a decade, insured adults and children have had access to no-cost preventive care if it’s recommended specifically for their age or condition.

A full list will be linked in the show notes, but it includes vaccines against things like flu, shingles, COVID-19, measles and tetanus; birth control; and screenings to catch conditions like cancer, depression, high cholesterol, and diabetes early.

Right now, that law is still in place, so if you’re eligible for any of these services, or your children or older relatives are, this is a good time to get those scheduled and done, says Fendrick.

There’s a legal case heading for the Supreme Court on April 21st of this year that could change eligibility for no-cost coverage of some or all of these services, depending on how the justices rule. 

The ruling likely won’t come until late spring or early summer, and might not take effect immediately, but it’s good to be aware that this benefit could change.

If you want to read more about the basis for the case, the kinds of services it could affect and the efforts some states are making to continue no-cost coverage no matter how the Supreme Court rules, we will have another Health Lab article linked in the show notes that you can read for a deeper dive.

4. If your health insurance plan has a high deductible, you can stash cash tax-free for future medical costs

Whether you get your insurance through your job or you bought it yourself, check to see what your deductible is.

But let’s back up a little bit and start with what a deductible is - A deductible is the amount of money that you have to pay on your own out-of-pocket for health costs, before your insurance kicks in and starts covering the rest. It’s just like most people’s car or truck insurance, though the dollar amounts for health costs can be much higher.

For 2025, the government defines having a high deductible health plan, or HDHP, as your deductible being above $1,650 if you only cover yourself, or above $3,300 for family coverage. 

To help you prepare to pay your plan deductible and for certain medical costs that are not fully covered by your plan, you should determine whether your HDHP can be paired with a Health Savings Account. 

If it can, you should open one of these accounts, also called an HSA for short, if you don’t already have one.

HSAs are unique in that they offer a 'triple tax advantage' because you can put money from your paycheck in before the government takes taxes out, you pay no taxes on any interest your money earns while it’s in the account, and you can withdraw the money tax-free as long as you use it for eligible health costs.

You should set up your HSA through an authorized financial institution, and learn the rules for adding money to it. 

You can also ask your employer to set up automatic withdrawals from your paycheck to go into the HSA. 

This way you’ll have money saved up when you need care. And even if you don’t spend it all this year, you can roll it over to pay for health costs in future years or in retirement. 

Note that HSAs are different from Flexible Spending Accounts, or FSAs, which are also tax-advantaged and offered by some employers to people who don’t have high-deductible plans, but FSAs have a “use it or lose it” rule every year.

5. If you have medical debt, it may no longer hurt your credit score

Let’s say you’re still paying off the bill from medical services such a hospital stay, or a dental procedure you had last year, chipping away at it month by month on a payment plan. Or maybe you haven't started paying yet.

Up until recently, this kind of debt could count against you when you tried to get a new loan for a car or house, open a credit card or rent an apartment. But now it probably won’t, thanks to a new regulation that was finalized in January and was scheduled to take effect March 17.

If it remains in effect, the regulation will also help people who want to appeal an insurance company’s denial of payment on a health care cost. The idea is that people won’t feel pressured to pay anyway just to protect their credit. But it is important to know that this new regulation doesn’t mean you can ignore emails and patient portal alerts about your medical bills, or throw paper bills away without paying. That’s still a bad idea.

If you’re having trouble paying what you owe, call the hospital or clinic where you got your care, and ask to speak with someone about payment plans or forgiveness of part of the debt under charity care provisions.

You can also call your insurance company to appeal their decision not to cover certain costs if you feel they should be covered.

If you don’t pay your debt, or have some or all of it forgiven, it could be sent to a collection agency. And even with the new law, debt that is in collections will hurt your credit if you owe more than $500.

6. Don’t be fooled by misinformation about drug costs

The change in who’s running the federal government means that some programs proposed under the last administration may not happen, or may be ended and a new version introduced.

Importantly, the elements of the Inflation Reduction Act that lowered out-of-pocket drug costs for Medicare beneficiaries remain in place. 

This includes the $2,000 annual out-of-pocket maximum, the $35 per month cap on insulin costs and the elimination of consumer cost sharing for vaccinations – such as shingles shots – that are covered under Medicare Part D. 

Although the new president invalidated one of his predecessor’s executive orders called 'Lowering Prescription Drug Costs for Americans', the agency that oversees Medicare has confirmed that the Cell and Gene Therapy Model – one of the model programs announced in response to this executive order – will continue. 

This program will promote access to innovative drug therapies for rare and severe diseases, but it has not yet begun to affect patients’ costs.

On March 12th, the agency that oversees Medicare announced that another program that would have lowered drug costs -- the Medicare Two Dollar Drug List Model -- will not take effect. 

Dr. Fendrick hopes the new Congress and administration will take other steps to reduce consumers' medical costs.

“There’s broad bipartisan support for lowering out-of-pocket drug costs, because we know this can make a major difference in health, especially for people with chronic conditions that could get worse if they don’t take their medications as prescribed,” he said.

7. If you are covered by a Medicare Advantage plan that’s not working for you, it’s not too late to switch coverage this year – but be careful

Did you or someone you love choose a Medicare Advantage plan during the Medicare Open Enrollment period, or stick with the same plan as last year, and then realize that it doesn’t cover certain drugs or services that you need, or blocks access to certain doctors and hospitals?

Thankfully, there’s a way to change coverage.

People who chose a Medicare Advantage plan for 2025 can actually switch to a different one, or return to traditional Medicare, as long as they act before March 31st. 

After March 31st, Medicare Advantage enrollees may still have options, including switching to a five-star plan if there’s one available in their area.

However, if you return to traditional Medicare, you need to also pick a Part D prescription drug plan at the same time to avoid a penalty, and if you make this switch and want to buy a Medigap plan to cover some of the things that traditional Medicare doesn’t cover, you may find that you will pay more or that you can’t even find a plan that will cover you, depending on your state insurance laws. 

8. If you have to buy your own health insurance, you can still get financial help with the cost, though that could change

People who don’t get insurance through a job or the government - Medicare, Medicaid, CHIP, VA or Tricare - have been able to buy insurance coverage through healthcare.gov or their state’s insurance marketplace for 10 years now.

And in the past several years, there’s been more financial help available in the form of discounts on monthly premiums and tax credits that you can claim immediately, depending on your income.

This extra financial support will go away for 2026 unless Congress and the president act to extend it, Dr. Fendrick notes, and people who rely on it may want to express their opinions about that to the people who represent them in Washington, D.C.

But for now, you can still get that support if you qualify for a special enrollment period on the national or state insurance marketplace. 

The most common reasons for qualifying are if you lose your insurance because of a job change, or your income goes up and you lose access to Medicaid or your child loses access to CHIP, or you have a life change such as having or adopting a child, getting married or divorced, or moving to a different state. 

If your income is low or goes down, you may also qualify for Medicaid coverage which you can enroll in year-round.

What will happen to Medicaid coverage eligibility and other rules like work requirements? 

Fendrick says this will depend on what Congress and the president decide to do, and what state legislatures and governors do in response.

Big changes could happen, so if you or people you love have Medicaid, now’s the time to tell your elected officials what you hope they will do.

9. More veterans are eligible for VA health coverage, and that coverage can be used at more locations

Under a federal law called the PACT Act, veterans’ health benefits are now available to many more people who served the nation and received an honorable discharge, including a 2024 change that opens VA benefits to people who did not deploy overseas but have a presumptive exposure to toxic substances. 

Also, under current programs that may be subject to change depending on what happens in Washington, D.C., veterans can get care at non-VA healthcare facilities using veterans benefits through the Community Care program. More information will be linked in the episode description.

But veterans need to get prior authorization for each appointment or service – even if they got a referral from a non-VA provider at the same location after seeing them. 

If a veteran has another kind of health insurance as well as having veterans' benefits, this is especially important, because there are time limits on how long after the care occurs that the VA will pay for it.

10. Don’t assume that because your insurance covered a drug before, that it will still cover it the same way this year, or all year

The list of prescription drugs that insurance plans will cover, and what they’ll ask you to pay when you fill a prescription - also known as your co-pay - can change at any time. 

These changes are called formulary changes. 

They can also include “step therapy” or “fail first” requirements or prior authorization requirements that mean you have to try a lower-cost drug before you can get a more expensive one, or your doctor has to justify why you should be allowed to get a certain drug because of your condition. 

Some states have passed laws about step therapy, but not all have. 

And though there are some rules about how insurance companies need to inform doctors and hospitals about these changes, they may not have to inform you unless you have Medicare drug coverage. 

You should be able to look at your insurance plan’s formulary on your insurance company’s website, however, they may not always be up to date, and you may have to call to get the most current information. 

There are things you can do if you suddenly find that your insurer has changed its coverage for your prescription medications. Links to learn more are included in the show notes. 

Additionally, you can also voice your opinion to your state health insurance regulatory agency and your elected officials at the state level about what you’ve experienced.

For more on this story and for others like it, visit michiganmedicine.org/health-lab where you can subscribe to our Health Lab newsletters to receive the latest in health research and information to your inbox each week. Health Lab is a part of the Michigan Medicine Podcast Network, and is produced by the Michigan Medicine Department of Communication. You can subscribe to Health Lab wherever you listen to podcasts.