Written and medically reviewed by Dorcas Morak, Pharm.D
If you are enrolled in Medicare Part D or considering joining, you have likely heard about some significant changes for 2025. These updates aim to make prescription drug coverage more affordable and predictable, but understanding the specifics can help you maximize your benefits. Let’s explore what is new and how it might impact you.
$2,000 Annual Out-of-Pocket Maximum and the End of the ‘Donut Hole’
One of the most anticipated changes in 2025 is the introduction of a $2,000 annual out-of-pocket spending cap for Medicare Part D. This replaces the previous "donut hole" coverage gap, which left many beneficiaries paying higher out-of-pocket costs after reaching a certain spending threshold.
Under the new policy:
- Once you’ve spent $2,000 on covered medications in a calendar year, you automatically qualify for catastrophic coverage.
- For costly medications like as Eliquis or Farxiga, reaching the $2,000 cap means you won’t pay anything more for covered drugs for the rest of the year. This significant update provides peace of mind for enrollees managing high prescription costs.
Introduction of Deductibles in Medicare Part D
Another key aspect of Medicare Part D is the annual deductible, which beneficiaries must pay before the plan starts to cover prescription drug costs. In 2025, the deductible will be:
- Limited to $545 for standard Part D plans.
- Often lower for Medicare Advantage plans with prescription drug coverage. Beneficiaries need to understand how the deductible interacts with other costs, including the new $2,000 spending cap, to accurately budget for their medications.
New Manufacturer Discount Program
Starting in 2025, the Medicare Coverage Gap Discount Program will be replaced by the Manufacturer Discount Program, which includes:
- A 10% discount on brand-name drugs and biologics during the initial coverage phase.
- A 20% discount for these medications after you reach the $2,000 catastrophic coverage threshold. This ensures enrollees receive financial assistance for high-cost, brand-name drugs throughout the year.
Flexible Payment Options for Prescription Costs
Another helpful update in 2025 is the option for Part D enrollees to spread out their prescription drug costs over the year instead of paying the full amount at the pharmacy. The Medicare Prescription Payment Plan allows you to:
- Pay for covered medications in monthly installments, making costs more manageable.
- Avoid large, one-time payments that can strain your budget. This payment plan can benefit people on fixed incomes or those taking high-priced medications.
Adjustments to Premiums
Medicare Part D premiums will see slight adjustments:
- The base beneficiary premium is capped at a 6% increase, rising to $36.78 in 2025.
- Average monthly premiums for stand-alone Part D plans are projected to decrease by 4%, while those for Medicare Advantage plans with drug coverage are expected to fall by 13% to $13.50.
- Enrollees with higher incomes will continue to pay an income-related surcharge. With these changes, reviewing your plan during the Medicare Open Enrollment period (October 15 to December 7) is important to find the best option for your needs.
Streamlined Plan Options
In 2025, stand-alone Part D plans will drop by 26%, with a 5% reduction in plans available to Low-Income Subsidy (LIS) beneficiaries. While fewer choices may seem limiting, this change is designed to simplify the selection process, making it easier for beneficiaries to compare plans and find one that suits their needs.
Even with fewer options, enrollees will still have access to at least a dozen plans in each state, ensuring a variety of choices.
Managing Medications Not Covered by Medicare Part D with the RxLess™ Assurance Plan
Medicare Part D offers broad coverage for prescription drugs, but there are still certain medications that may not be included. Common exclusions include:
- Lifestyle Medications: Drugs for weight management (e.g., phentermine) or erectile dysfunction (e.g., Viagra) are typically not covered.
- Over-the-Counter (OTC) Medications: Even if recommended by a healthcare provider, most OTC medications are excluded from Medicare Part D.
- Cosmetic Medications: Treatments for cosmetic purposes, such as hair loss (e.g., Propecia), are not usually covered.
- Experimental or Newly Approved Treatments: Some newly introduced drugs or experimental treatments may not yet be part of Medicare’s formulary.
For these situations, the RxLess™ Assurance Plan is a valuable resource, offering discounted prices on medications not covered by Medicare Part D. Beneficiaries can use the free RxLess™ app and become a member of the RxLess™ Assurance Plan to compare prices and find affordable options for their prescriptions, ensuring they can access necessary medications without relying solely on their Part D plan.
How the RxLess™ Assurance Plan Can Help in 2025
The RxLess™ Assurance Plan makes it easy to save on prescriptions at participating pharmacies across the country. By searching for a medication in the free app and using the provided coupon, beneficiaries can lower their out-of-pocket costs for drugs that fall outside Medicare coverage.
Conclusion
With the introduction of a $2,000 annual out-of-pocket spending cap and simplified cost-sharing phases, Medicare Part D in 2025 has brought significant financial relief to beneficiaries. However, for medications that are not covered, RxLess™ provides an essential alternative for finding affordable options.
By taking advantage of the RxLess™ Assurance Plan and staying informed about coverage changes, Medicare enrollees can ensure they receive the medications they need at the lowest possible cost.
