Let’s highlight the major changes happening in 2025 with prescription drug coverage, aka Part D.
Due to the implementation of the Inflation Reduction Act (IRA), there will be a few major changes to prescription drug coverage beginning in 2025. The changes include:
1. Reduced maximum out-of-pocket costs
Once your true out-of-pocket costs have reached $2000, you will enter the catastrophic coverage phase and will pay $0 in prescription drug costs for the rest of the year.
2. Elimination of the coverage gap (aka “the donut hole”)
There has always been four phases to drug coverage, but beginning 2025, there will be only three. These three phases will include the yearly deductible (maximum $590) the initial coverage phase, and the catastrophic coverage phase.
3. Prescription drug payment program
Requires Part D plan sponsors to provide enrollees with the option to pay out-of-pocket prescription drug costs in the form of monthly payments to the pharmacy over the course of the plan year instead of all at once.
What you need to know about the new Medicare Prescription Payment Plan
The Medicare Prescription Payment Plan is a payment option that helps manage out-of-pocket Part D drug costs.
You can opt-in to the program, which allows prescription costs to be spread across monthly payments that are billed directly to you.
When you fill a prescription for a drug covered by a Part D plan, you won’t pay anything at the pharmacy.
You will receive a bill each month from the plan. The billed amount can vary from month to month based on prescriptions filled.
It is important to remember that this is not a cost-savings program and won’t be beneficial for everyone. To find out if it is right for you click here.
What to expect
Potentially higher premiums, copays and deductibles on Part D plans. Formularies may be less comprehensive, but are required to contain at least 2 drugs in the most commonly prescribed drug categories.
Important
Review your “ANOC” (Annual Notice of Change) letter, from the insurance carrier, that will outline any changes to your plan for 2025. Typically, this letter comes around October 1st. Make sure to hold on to this letter.