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Medicare Disruption and the Inflation Reduction Act: What to Know Now

Dwane McFerrin, Senior Vice President of Med Solutions at Senior Market Sales® (SMS) expounds upon his stand that “2025’s AEP will likely be the most disruptive ever.” In an informative three-part video, McFerrin provides facts and figures pertaining to the Inflation Reduction Act and how it could contribute to the disruptive environment. He also provides no-cost solutions for overcoming said disruption so that you can experience a successful AEP where you save time and make more money.

What is the Inflation Reduction Act?What is the Inflation Reduction Act?

  • An omnibus bill that was signed into law on Aug. 16, 2022
  • The cost of this bill – $750 billion
  • Among other things, the bill is designed to help reduce the cost of prescription drugs for seniors
  • The bill has some unintended consequences that are potentially detrimental to agents who offer Medicare Advantage (MA) or Part D (PDP) plans

What the Inflation Reduction Act DoesWhat are some positive things that the Inflation Reduction Act does?

  • Caps out-of-pocket Medicare PDP costs at $2,000 starting in 2025
  • Starting back in 2024, it capped insulin drug costs at $35
  • Sunset of the coverage gap
  • A newly defined standard PDP benefit design consisting of three phases – annual deductible, initial coverage and catastrophic coverage
  • Gives the Centers for Medicare and Medicaid Services (CMS) the ability to negotiate pricing with drug manufacturers starting in 2026
  • Expands low-income subsidy program under Medicare Part D to 150% of the federal poverty level starting in 2024

Out of Pocket Drug CostsA recent Kaiser Family Foundation article states that 5 million Part D enrollees had out-of-pocket drug costs of $2,000 or more in at least one year during the 10 years between 2012 and 2021, and more than 6 million Part D enrollees have paid $2,000 or more out of pocket in at least one year since 2007.

Inflation Reduction ActWhat are some potential unintended consequences surrounding the Inflation Reduction Act?

  • Millions could see potential premium increases as carriers absorb the impact of this legislation
  • Benefits could decrease or carriers could choose to leave the market altogether, thus reducing choice for the consumer

Carriers need to stay profitable. Therefore, these changes will likely lead to increased premiums, decreased benefits or both.

ANOC Sticker ShockWith all this coming disruption, what can be done to minimize the effects of unintended consequences?

Your clients will receive their Annual Notice of Change (ANOC) letters in September, and it’s anticipated that many will experience sticker shock when they open that envelope. You need to be prepared and SMS is here with resources to help effectively communicate these changes to your clients, thus opening you up to offer solutions that work.

SMS, a premier field marketing organization (FMO) focusing on the health and wealth markets for seniors, offers several solutions designed to help you save time, make more money and put your business in a position of distinction for the 2025 AEP season and beyond. Whether you focus on Medicare solutions, annuities, life, long-term care, final expense, are a registered representative or in the investment advisor markets, SMS can help.

What are 3 tools and services available to SMS agents at no cost?

In-house PharmacistNo. 1: In-house pharmacist, Ryan Vlasin, full-time pharmacist at SMS, pharmacist@seniormarketsales.com

  • Helps ensure you have an understanding of your clients’ prescription drug needs
  • Sets you apart from your competition because this is a benefit not found in the vast majority of FMOs



No. 2: Lead Advantage Pro® – A way to take prospects from lead to enrollment in one place

  • Scope of Appointment options expand beyond paper and now offers remote, face-to-face and voice signature availability
  • Five enrollment options — paper, Agent Initiated Consumer Online Enrollment (AICOE®), voice signature, face-to-face and electronic carrier application
  • Stay compliant with CMS regulations by utilizing disclosures displayed on emails for MA and PDP enrollments
  • Clients can now update their providers, prescriptions, pharmacies and preferred hospitals, by using the Client Self-Service Portal
  • The Multi-Client Rx report can search multiple clients to address prescription drug concerns, including price increases or dropped coverage on plans
  • Transfer your client data from Lead Advantage Pro to Medicare Insurance Direct® for MA and PDP quoting

Medicare Insurance Direct


No. 3: Medicare Insurance Direct (MID) – A way for clients to save you time by self-enrolling in a Medicare solution using your valid advice

  • Shop, provide quotes and enroll clients, regardless of time or location, using any device
  • Gain access to an extensive carrier list and manage your book of business
  • Deliver personalized, accurate cost estimates for plans and drug costs
  • Stay compliant by obtaining electronic or voice Scope of Appointment
  • Product lines include MA, PDP, Medicare Supplement and dental

Prepare for the 2025 AEP with SMSWhat can you do now to prepare for potential 2025 AEP disruption?

  1. Obtain the complimentary tools mentioned in this article and receive training from qualified SMS marketing consultants so you’re ready to go when your clients receive their ANOC letters. Plus, check out additional sales tools available through SMS.
  2. Reach out to a licensed SMS marketing consultant with any questions or needed assistance at 1.888.747.3810.
  3. Obtain your MySMS account to get exclusive content and help during AEP and beyond.

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