In 2025, Medicare beneficiaries can expect significant changes to how prescription drug costs are managed by either their stand-alone prescription drug plans (PDP) or Medicare Advantage plans (MAPD). While these changes are part of a broader effort to enhance the sustainability and effectiveness of Medicare, many fear that they may come with increased costs.
So, what’s changing? For the first time since the program was implemented in 2006, Medicare Part D is being completely redesigned for 2025. The changes include revisions to deductibles, initial coverage limits, and the catastrophic coverage threshold. One of the main reforms of the CMS Final Rule is that beneficiaries will be capped at an annual maximum of $2,000 in out-of-pocket costs for their prescriptions. For Medicare beneficiaries who take expensive medications, this will drastically reduce what they spend when they pick up their prescriptions. Currently, there are several stages of Part D, making costs unpredictable and very high at different times throughout the year.
While there are certainly many positive implications of this reform, many are concerned with how their current Medicare plans may change. While nothing is set in stone, industry experts are expecting monthly plan premiums and deductibles to increase quite drastically, due to the carriers having to take on more of the responsibility with regard to the cost of the prescriptions themselves. Another potential concern is that companies may overhaul their formularies, changing which drugs they cover or how much they cost.
We encourage every Medicare beneficiary to be proactive and develop a plan for this year’s Annual Election Period (AEP), between October 15th and December 7th. Below are a few strategies to keep in mind to ensure you’re prepared and in the proper coverage on January 1st:
Be on the lookout for your Annual Notice of Changes (ANOC) letter from your current plan provider, which usually arrives sometime in September. This letter identifies all the changes to your current plan for the ensuing year.
Explore all of your options during the AEP. Plans will likely be changing more than they ever have. It’s very possible that the best option in 2025 will be different than what the best option was in 2024. Be open to possibly switching carriers in order to cover your prescriptions more effectively.
Plan ahead and budget for potentially higher monthly premiums.
Work with an independent agent who’s able to offer multiple carriers and plan choices to you. Having the flexibility to pivot from year to year, especially with such drastic changes taking place, is crucial to maintaining optimal coverage.
While changes to Medicare Part D in 2025 aim to improve the program’s efficiency and
sustainability, they may require proactive adjustments on your part to manage healthcare expenses effectively. By staying informed, reviewing your options, and seeking guidance from healthcare professionals, you can navigate these changes with confidence and ensure that your prescription drug coverage continues to meet your needs.
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