The Inflation Reduction Act of 2022 introduced several measures to decrease prescription drug costs for Medicare beneficiaries and to curb federal drug spending. Key modifications to the Medicare Part D drug benefit included a limit on out-of-pocket drug expenses for those enrolled in Medicare Part D plans and increased cost-sharing responsibilities for both Part D plans and drug manufacturers, particularly for enrollees with high drug expenses.
Today, we’ll review the changes that took place in 2023 and 2024 and then discuss what Part D changes you can expect in 2025.
Part D Changes in 2023 and 2024
Let’s start with a quick review of changes that already occurred within Medicare Part D plans.
Nothing extremely notable happened in 2023. Outside of the typical changes in standard deductibles and coverage limits, most things stayed the same. One thing that changed was insulin costs. Starting in 2023, all Part D plans capped their covered insulin charges at $35, and insulin costs did not apply to the plan’s deductible. In addition, vaccines that fell under Part D had no deductible or cost-sharing responsibility. This was especially helpful for those who still needed to get their shingles vaccine, as that vaccine usually applied to the Part D deductible and would often cost beneficiaries several hundred dollars.
We saw slightly more significant changes in 2024. In prior years, beneficiaries were responsible for a 5% coinsurance cost when in the catastrophic phase of coverage. That coinsurance amount was eliminated in 2024. This resulted in thousands of dollars of savings for those who often found themselves in this final phase of Part D coverage.
Medicare Part D Changes in 2025
Now, let’s talk about what you can expect to see in 2025.
First, there will be a $2,000 out-of-pocket spending cap on all Medicare Part D plans. Once you’ve spent a total of $2,000 on covered prescriptions, you will not be responsible for any copays or coinsurance amounts. While we can expect this cap to increase each year, it will certainly offer relief to beneficiaries who are taking expensive medications. Currently (2024), the cap is effectively set at $3,300, so this decrease will be substantial.
In addition, the coverage gap, also known as the Medicare Donut Hole, will be completely eliminated. In this phase, beneficiaries had to pay more for their prescriptions—25% of the cost in 2024. This third phase of Part D coverage will not exist in 2025.
Beneficiaries will also see some savings while in the initial phase of coverage. This phase occurs after the deductible has been, but before entering the coverage gap. During the initial coverage phase, drug manufacturers must give a 10% discount on covered, name-brand medications. All Part D plans will pay at least 65% of name-brand drug costs.
Lastly, starting next year, Part D enrollees will be able to spread out their out-of-pocket costs throughout the years rather than having higher costs in certain months.
Review Your Part D Plan
As we approach these significant changes to the Medicare Part D Prescription Drug Plan, it’s important for you to stay informed and prepared. The adjustments in cost-sharing and out-of-pocket spending caps are designed to make medications more affordable, but understanding how these changes affect your specific situation is essential. We may also see negative side effects of these positive changes, so stay informed and be sure to review your Part D plan during the Annual Election Period!
At Carolina Senior Benefits, we’re here to help you navigate these updates and ensure you have the best possible coverage. Contact us today to discuss your Medicare Part D options and how the upcoming changes may impact you. Stay informed, stay covered, and let us support you every step of the way.
