• In 2025, a $2,000 annual out-of-pocket cap will keep Medicare enrollees’ costs for drugs covered by Part D plans low.
• A payment plan would allow Medicare enrollees to pay for their medications in limited monthly installments rather than paying the full cost up front at the pharmacy.
• A decline in the number of stand-alone Part D drug plans would mean fewer options for enrollees, which could make the process of choosing a Medicare plan easier.

Several changes are coming to Medicare’s Part D prescription drug plans in 2025, including changes to premiums, a new out-of-pocket cap, and a decrease in the number of drug plans offered that could potentially impact enrollees’ benefits and costs.

“All in all, these 2025 changes offer a good balance between managing costs and adding protections for Medicare beneficiaries,” said CEO Brandy Burch. BenefitBay.

“For most people, these updates will provide greater stability and predictability in healthcare spending,” Burch told Healthline, “and can make a big difference when it comes to planning for the year ahead.”

Here’s a summary of the top five changes coming to Medicare Part D prescription drug plans.

Medicare Part D base beneficiary premiums will increase in 2025 compared to the previous year. But that doesn’t mean Medicare enrollees will pay more out-of-pocket each month for Part D drug benefits.

The Inflation Reduction Act is also premium stabilization mechanism. This limits actual premium increases for Part D plans to about $2 per month on average.

The base premium is not what Part D enrollees pay each month. It is the base amount allowed for bonuses.

However, a recent analysis ValuePenguin found that overall Medicare Advantage premiums will increase 4% from the previous year, from $24 to $25 per month in 2025. This rate change varies by state.

These are average changes, so your plan’s premiums may change by different amounts (up or down). It is important to shop during this period Medicare Open Enrollment periodValid from October 15 to December 7 to find the plan that best suits your budget and needs.

“You may have heard:donut hole” — or the gap in prescription drug coverage — about Medicare Part D.

You fall into this gap when your Medicare Part D plan pays a certain amount for your prescription drugs during a single year of coverage. At this point, you’ll be paying more out of pocket for your prescription drugs until you reach your annual limit.

Depending on your plan, the plan may help you repay the cost of your prescription drugs once you reach your annual limit.

If this sounds confusing, don’t worry. The donut hole will disappear after 2024 and will be replaced by a new one $2,000 out-of-pocket limit. This change, due to the Inflation Reduction Act, affects all Medicare plans.

Once you pay $2,000 out-of-pocket for covered drugs during a calendar year, you will automatically be covered by “catastrophic coverage.” As a result, you won’t have to pay out-of-pocket for Part D covered drugs for the rest of the year.

An estimated 1.4 million Medicare Part D enrollees with low-income subsidies are expected to benefit from the $2,000 out-of-pocket cap. reports KFF. These people had annual out-of-pocket expenses above this limit.

Burch said the $2,000 out-of-pocket limit would have a big impact for Medicare enrollees.

“For people who rely on expensive medications, having this cap means they can finally plan their healthcare budget without worrying about unexpected high costs,” he said. “This is a big step in providing peace of mind and knowing that once they reach the $2,000 threshold, they are covered for the rest of the year.”

This change will not only lower out-of-pocket drug costs for enrollees — especially those taking multiple or high-priced medications — but is also likely to help them. take your medications as prescribedcan improve health outcomes.

Additionally, in 2025, Part D enrollees will have the option to pay their fees. prescription drug costs in limited monthly installments rather than all at once at the pharmacy.

Medicare Prescription Payment Plan It’s available at no cost to all plans, including Medicare drug plans and Medicare Advantage plans with drug coverage. However, participation is optional.

If you choose this option, instead of paying for your medications at the pharmacy, you will receive a monthly bill from your Medicare drug plan or Medicare Advantage plan.

“This (payment plan) reduces the cost (of medications) over time, making it more manageable,” Burch said. “It’s like having some breathing room instead of suddenly being faced with a huge payment. “And this flexibility can be a relief for those on a budget.”

Jenn Kerfoot, chief strategy and growth officer DUAL He pointed out that people covered by the Medicare Prescription Payment Plan cannot be sent to credit collectors for not paying their bills. But the plan could kick them off the payment plan if they don’t pay their bills, he told Healthline.

KFF reports There will be 26% fewer standalone Part D plans in 2025 than in the previous year, and 5% fewer Part D plans for Low Income Subsidy (LIS) beneficiaries.

These declines are due to changes from the Inflation Reduction Act that takes effect in 2025, including a $2,000 out-of-pocket cap. Part D plans and drug manufacturers will also have to pay a larger share of drug costs above the cap, and Medicare will charge less for drug costs.

But KFF said enrollees in each state can choose from at least a dozen standalone plans and many Medicare Advantage drug plans.

Some people may lose their current plans, but overall having fewer plans can help make things easier for people during Medicare Open Enrollment.

“Fewer options mean people won’t have to spend as much time evaluating and comparing endless options, which can be very tiring,” Burch said. “For many older adults, a simplified set of options can streamline the process and help them focus on finding the best fit without the guesswork.”

The Coverage Gap Discount Program is no longer needed as the donut hole is eliminated due to the new $2,000 out-of-pocket limit.

Will be replaced from 2025 Manufacturer Rebate Program. Under this program, the manufacturer will typically pay a 10% rebate for branded drugs and biologics in the initial Part D coverage phase, CMS said.

Once a beneficiary reaches the catastrophic stage (beyond the $2,000 out-of-pocket limit) the manufacturer will typically offer a 20% discount on these drug and biologic products.

“This change could change the way drug discounts are applied, especially for brand-name drugs,” Burch said. “But the good news is that financial assistance for prescriptions should still be available (for those who are enrolled).”

But “it is important for enrollees to double-check how this update may affect their specific medications during open enrollment,” he added. “This way they can avoid any surprises when it comes to costs.”

Kerfoot recommends that people consider several things when shopping for a Medicare drug plan this year, including whether their 2024 plan is still offered, whether their current plan cuts benefits, whether the drugs they take are still covered by the plan, and whether they are covered by this plan. premium has changed.

Burch also suggests people keep in mind five big changes that will happen next year.

“Due to adjustments in out-of-pocket limits, payment options and plan selections, it is important to choose the plan that best suits individuals’ specific health and financial needs,” Burch said. “Taking a little more time now to understand the new environment can help you save a lot of worry and potentially a lot of money throughout 2025.”

Several changes are coming to Medicare Part D prescription drug plans in 2025, which could affect drug costs and plan coverage. One change is the $2,000 annual out-of-pocket limit. Once enrollees reach this limit, they will not have to pay out-of-pocket for their medications for the rest of the year.

A new payment plan that will allow registered people to pay for their medications in limited monthly installments instead of paying all at once at the pharmacy is also coming into effect in 2025. This no-cost option is available for all Part D plans, including Medicare Advantage plans with drug coverage. Participation is voluntary.

In 2025, there will be 26% fewer standalone Part D plans than in 2024 and slightly fewer Part D plans for low-income older adults. But with at least a dozen standalone plans available in every state, enrollees will still have options.