Medicare Changes for 2025: How Your Coverage May Be Affected

The Inflation Reduction Act (IRA) was signed into law in 2022 and set out goals for addressing health, tax and climate concerns. One of the key targets was the growing issue of prescription costs — particularly how those costs are affecting Medicare users. The goal for Medicare was to improve in several ways, including lowering drug costs, expanding benefits and stabilizing prescription drug plan premiums.

The changes started with a $35 cap on monthly insulin copays and free vaccinations in 2023.* Then in 2024, eligibility was expanded for Extra Help subsidies, lower Part D out-of-pocket costs for catastrophic coverage, and limits to Part D premium increases.

2025 Changes: Prescription Drug Coverage

For plan year 2025, important changes arrive for Prescription Drug coverage and benefits. Understanding these changes will help you be prepared to make the right coverage decision for you. There are three major changes to Part D.

1. New Part D out-of-pocket maximum**

This first-of-its-kind limit will put a cap on the maximum amount people will have to spend out of pocket on their prescription drugs. The out-of-pocket cap will be $2,000 per year and will be the same for those purchasing Part D coverage separately or getting their prescription coverage through a Medicare Advantage plan.

2. Elimination of “Donut Hole” Coverage Gap*

Previously, Part D beneficiaries could face a coverage gap which meant large out-of-pocket costs before reaching the catastrophic coverage phase. Now, the “donut hole” gap is removed completely – leaving only the deductible, initial coverage phase and catastrophic phase after you reach the $2,000 maximum out-of-pocket.

3. Spread out prescription drug costs over the year***

In 2025, Part D enrollees will have the option of spreading out cost-sharing payments over the course of a calendar year, called “smoothed cost sharing.” For example, if you have a prescription that costs $300 every 3 months, you will now have the option to pay $100 per month — the same $1,200 for the year.

Next Steps: Read Your Annual Notice of Change Letter

This year, your annual notice of change (ANOC) letter from your plan carrier is more important than ever. It will describe any changes for your existing plan for the next enrollment year (2025).

Due to the 2025 Part D adjustments in the Inflation Reduction Act, many plans with Part D coverage will have changes – and you need to be able to understand the changes, weigh your options and make the right choice for you.

How to Navigate Medicare for 2025 – Get Personalized Help

We know the 2025 updates will impact many Medicare beneficiaries, and PlanEnroll is here to help you. We built PlanEnroll to offer value to consumers like you, connecting you to the information, guidance and personalized help you want.

PlanEnroll Offers:

• Knowledgeable Support
  • Our licensed insurance agents take the time to build a relationship with you to help recommend a plan that fits your needs
• Easy Access to Premium Service
  • When you create a secure online profile with your relevant information, your agent can offer their guidance — at no additional cost or obligation to you
• Wide Carrier and Product Selection
  • A nationwide agent network has access to local and national plans to find the right fit for your unique needs

Feel confident about your 2025 Medicare decision. Take charge and connect with a licensed PlanEnroll agent.

Call us to speak with a licensed insurance agent.

*Changes to Medicare Part D in 2024 and 2025 Under the Inflation Reduction Act and How Enrollees Will Benefit, KFF, https://www.kff.org/medicare/issue-brief/changes-to-medicare-part-d-in-2024-and-2025-under-the-inflation-reduction-act-and-how-enrollees-will-benefit, accessed September 2024

**Part D Improvements, CMS, https://www.cms.gov/inflation-reduction-act-and-medicare/part-d-improvements, accessed September 2024

***Inflation Reduction Act and Medicare, CMS, https://www.cms.gov/inflation-reduction-act-and-medicare, accessed September 2024

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