Medicare Part D plans are stand-along prescription drug plans available to those with original Medicare. Part D coverage is sold by private companies. Several big changes are coming to Part D in 2025 as a result of the Inflation Reduction Act, enacted in 2022. Whether you are already enrolled in a Part D program or thinking of enrolling for the first time, you should be aware of these important changes as you evaluate which Part D program is most beneficial for your needs going forward.
$2,000 Cap on Out Of Pocket Costs For Approved Drugs
Effective January 2025, there will be a $2,000 cap on the amount a Part D enrollee will pay out-of-pocket for prescription drugs. The cap applies to those medicines that are on your formulary. The cap also applies to people whose prescriptions are covered through a Medicare Advantage plan.
The deductible in 2025 will be $590.
Annual Premium Increase Limits
Increases in Part D premiums are limited to no more than 6% annually. The cap is indexed to inflation. That limit remains in place through 2029.
Medicare Prescription Payment Plan (MPPP) Introduced
If you have a stand-alone Part D plan, next year you will have the option to “smooth” out your payments by enrolling in the MPPP program. The MPPP program will give you the option of paying for your prescription drugs in monthly installments, rather than absorbing the cost all at once at the pharmacy. It could be particularly helpful to those who need very expensive prescriptions. Note that the MPPP program does not actually decrease your costs; it merely gives you a way of paying over time.
You will need to opt into the MPPP. If you opt in, you will receive a monthly bill from your Part D plan.
Time to Evaluate Your Part D Plan for 2025
Medicare Open Enrollment is October 15 – December 7, 2024. This is the window when you can make changes to your coverage. Now is the time to evaluate your choices, taking into consideration all the changes coming in 2025. If you switch plans you do not need to cancel the existing plan; this will occur automatically. Here are some factors to consider:
- What is your current health status?
- What new prescriptions will you need for 2025?
- Check each plan’s formularies and tiers. Covered prescriptions can change from year to year.
- Is your local pharmacy in the plan’s network? If so, this could be a cost savings for you.
Find Out More
You can check plans available in your area here.
Additional info is available here.
