Significant changes to Medicare’s Part D coverage are coming in 2025. Whether this means you will pay more or pay less for your prescription drug coverage will depend on several factors including which medications you take and who your insurance carrier is.
The Inflation Reduction Act Helps with RX Costs
The Inflation Reduction Act (IRA) of 2022 is an expansive bill that includes several provisions to lower prescription drug costs for Medicare beneficiaries over several years. Changes for January 1, 2025, include:
- Eliminating the Part D coverage gap, also known as the “Donut Hole,” and putting a $2,000 out of pocket annual spending cap on Part D drugs in 2025. This significantly lowers the spending cap from $8,000 in 2024. This provision applies to all Part D plans, whether stand alone or part of a Medicare Advantage plan. The cap does not apply to Part B drugs.
- Helping Medicare beneficiaries pay for their medications with the Medicare Prescription Payment Plan. This voluntary, opt-in program helps spread Part D costs out over the year in monthly installments. This will protect beneficiaries from incurring high prescription costs in any given month, making their prescriptions easier to afford.
Other Impacts to Part D Costs
While these changes from the Inflation Reduction Act are positive news, it is anticipated that the cap could also have some negative impacts on the cost of Part D plans and prescriptions as more of the cost sharing shifts from Medicare to the insurers and drug manufacturers. This change in financial responsibility along with the increasing cost of healthcare means insurers will be looking for ways to offset these expenses.
Here are some of the changes you might see with your coverage in 2025:
- Increased Part D premiums, deductibles, and copays
- Changes to drug formularies including
- Which drugs are covered by your plan
- Changes to which tiers your medications fall on as drug manufacturers may increase the cost of some medications
- Additional requirements for prior authorizations, step edits or quantity limits for certain medications
- Changes to provider and pharmacy networks since insurers may try to lower their negotiated payment rates with providers causing some disruption to their networks.
- Some insurers may reduce the number of Part D plans they offer, eliminating them in some areas.
Review Your Annual Notice of Change
If you have a Medicare Advantage or Part D stand-alone plan, you must be notified by your insurance carrier every September of any changes to your plan for the upcoming year. This is known as the Annual Notice of Change (ANOC). It is sent out prior to the fall Annual Enrollment Period October 15 through December 7 so you have time to review the changes and find a new plan if necessary.
Even if you are currently happy with your plan, it will be very important this year to thoroughly review your ANOC for any changes that may negatively impact you next year, such as increases to your out of pocket costs. You should carefully review the drug formulary for each of your medications to see if anything has changed.
How a Medicare Agent Can Help
Reviewing your ANOC and understanding how the changes will affect you might feel a little daunting. The good news is you don’t have to figure this out on your own. A local licensed Medicare agent has the experience and expertise to help guide through the decision making process. They can help you determine if your current plan is still a good fit. If you need to change plans, they can help you find a new one that meets your needs based on the doctors you see, the medications you take, your health, your lifestyle, and your budget. They can assist you enrolling in a new plan for 2025.
If you can’t afford your medications, there are state and federal programs that can help with your expenses if you qualify. A Medicare agent can help you determine if you meet the requirements.
The experienced team at Healthcare Educators will educate you on your Medicare options so you can make an informed decision. They make Medicare easy. Contact us today for a free consultation.