2025 is bringing significant changes to Medicare Part D coverage and costs. This is partly due to the Inflation Reduction Act of 2022. Learn the five ways that Medicare Part D plans will change in 2025.
Beginning in 2025, Medicare Part D prescription drug plans and drug coverage in Medicare Advantage plans will cap out-of-pocket costs at $2,000. This $2,000 maximum includes deductibles, copayments, and coinsurance for covered medications. It does not include premiums or drugs that your plan does not cover. The cap amount may be adjusted in the coming years if Medicare Part D costs rise.
In 2024, Medicare beneficiaries could spend $8,000 in out-of-pocket costs before hitting catastrophic coverage. This is the first time the Medicare program has capped this amount. As a result of this change, beneficiaries may find that prescription drug plan premiums have increased in 2025. That is why it’s critical that you review your Medicare plan during the Medicare Annual Enrollment Period (October 15 – December 7). You may be able to find a plan that better suits your health and budget needs.
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Local, licensed insurance agents with 25+ years of experienceBecause of the Medicare cap on prescription drug out-of-pocket costs, Medicare beneficiaries enrolled in a Medicare Part D or Medicare Advantage Prescription Drug plan will not have a “donut hole” or coverage gap. The coverage gap ends on December 31, 2024.
Starting in 2025, you’ll automatically get catastrophic coverage once you reach the $2,000 prescription drug out-of-pocket maximum on covered drugs. That means you won’t pay out-of-pocket for covered Medicare Part D medications for the remainder of the calendar year. If you have a Medicare plan with prescription drug coverage, ensure that you review your plan during the Medicare Annual Enrollment Period (October 15 – December 7).
If you have high prescription drug costs at the beginning of the calendar year (January – December), this new program from Medicare may help you. The Medicare Prescription Payment Plan works with your current prescription drug plan coverage to help you manage out-of-pocket costs by spreading them across the calendar year.
Agent tip:
“Medicare Prescription Payment Plans are available to those enrolled in Medicare Part D or a Medicare Advantage plan with prescription drug coverage.“
If you enroll in the Medicare Prescription Payment Plan option, you’ll continue to pay your plan premium every month (if you have one), plus you’ll get a bill from your health or prescription drug plan to pay for your prescription drugs. You would pay the plan directly instead of paying the pharmacy. You can start participating in the Prescription Payment Plan option at any time of the year.
Starting in 2025, anyone with a Medicare Part D or a Medicare Advantage Prescription Drug plan (a Medicare Advantage plan with drug coverage) can use the Medicare Prescription Payment Plan option. All prescription drug plans offer this payment plan option, and participation is voluntary. There is no cost to participate in the Medicare Prescription Payment Plan.
Free, unbiased serviceCompare all major plans and carriers Local, licensed insurance agents with 25+ years of experienceMedications such as Ozempic, Wegovy, Rybelsus, Mounjaro, and similar medications have been approved to treat diabetes and heart disease (cardiovascular disease) with obesity. The Food and Drug Administration (FDA) may continue to approve additional medications and uses. While Medicare doesn’t approve these medications for weight loss alone, that may change.
Ozempic, Rybelsus, and Mounjaro’s spending for treating diabetes increased from $57 million in 2018 to $5.7 billion in 2022. And spending is on an upward trajectory. As we see the variety and uses of these medications expand, we could see Medicare coverage expand to weight loss. The Treat and Reduce Obesity Act of 2023 is a bill that would allow Medicare to cover weight loss drugs for the first time. The House of Representatives passed the bill out of committee and into the full House in June 2024. We’ll have to wait and see if the bill is passed in 2025, opening up the opportunity for weight loss to be covered by Medicare for the first time.
The average Medicare Part D prescription drug plan premium is $34.70 monthly in 2024. In 2025, you may find that your prescription drug plan premium will increase, including Medicare Advantage plans with prescription drug plan coverage. The increase may result from the new cap on out-of-pocket expenses, discontinuation of the coverage gap, catastrophic coverage changes, and the expanding coverage and rising cost of medications for diabetes and related chronic illnesses. When there is a decrease in the expenses in one area, it’s usually offset by another.
A lot of change is happening for Medicare Part D in 2025 and beyond. Because of the rising premium costs and coverage changes, individuals and caregivers should schedule a Medicare plan review during the Medicare Annual Enrollment Period from October 15 through December 7. A plan review will ensure you get the care you need at an affordable price in 2025.
Everyone on Medicare can schedule a plan review during the Medicare Annual Enrollment Period between October 15th – December 7th. Call to speak with a local licensed Connie Health agent in your area.
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Medicare Part D will function relatively similarly in 2025, with two exceptions. Medicare Part D prescription drug plans will have a maximum out-of-pocket for the first time. Instead of hitting catastrophic coverage at $8,000, like in 2024, once you hit $2,000 in spending towards deductibles, copayments, and coinsurance for covered medications, you won’t need to pay more for covered prescription medications for the remainder of the year. The “donut hole” or coverage gap will end on December 31, 2024
Three significant changes are coming to Medicare Part D prescription drug coverage in 2025.
Medicare Part D changes in 2025 include eliminating the “donut hole” or the coverage gap, capping out-of-pocket prescription drug plan costs at $2,000 per year, and the new Medicare Prescription Payment Plan. You may also find that Medicare Part D and Medicare Advantage plans with prescription drug plan coverage have more costly premiums due to the elimination of programs, the cap on out-of-pocket spending, drug price negotiations, and cost pressures from increasingly utilized diabetes prescription medications.
Read more by Renee van Staveren
Since 2009, I've been writing about complicated, technical issues, with the goal of making topics like Medicare and healthcare easier to understand. I've been writing about Medicare since 2021 and healthcare since 2019. I am an AmeriCorps alumni. I enjoy gardening, reading, and DIYing.
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