There are significant changes coming to Medicare Part D plans in 2025.

In 2024 once your out-of-pocket spending on prescriptions tops about $3,300, you qualify for Medicare’s “catastrophic coverage” and pay nothing for your covered Part D drugs for the rest of the year. (In 2023, once you hit catastrophic coverage, you still owed 5% of your drug costs.)

But come 2025, people with Part D plans won’t have to pay more than $2,000 in out-of-pocket costs, thanks to a provision in the Inflation Reduction Act of 2022. 

This new rule applies only to medications covered by your Part D plan, though, and does not apply to out-of-pocket spending on Medicare Part B drugs. Part B drugs are usually vaccinations, injections a doctor administers, and some outpatient prescription drugs.

The $2,000 cap will be indexed to the growth in per capita Part D costs, so it may well rise each year after 2025.

The $2,000 cap will likely save money for some Medicare beneficiaries, particularly ones taking expensive brand-name drugs.

But it’s completely possible the cap will have detrimental effects on people who have or who are looking for Part D plans too. 

Experts think some Part D [plan sponsors will look for ways to offset the new, extra costs. That could mean more prior authorizations to get prescriptions, additional restrictions on which medications the plans cover, and hikes in Part D premiums and co-pays. Or some mixture of these. 

The $2,000 cap could even encourage some health insurers to stop offering Part D plans altogether. 

If you are already enrolled in a Part D plan, make sure you check your ANOC (Annual Notice of Changes) carefully when your plan sends it to you in September, most especially any changes to your plan’s formulary, or list of covered medications.  

Advice for people looking to enroll in Medicare Part D plans in 2025: Review your choices carefully, using the Medicare Plan Finder, to see whether the prescriptions you take will be covered by the plan or speak with an independent broker who specializes in Medicare health plans who can help you check for your medications with multiple Part D plans.  

Please contact the professionals at Total Benefit Solutions, Inc (215)355-2121 or of you have any further questions !