Prescription Drug Coverage Changes In 2025

Prescription Drug Coverage Changes in 2025

“Of all the questions I get from my clients- Drug Coverage is usually their biggest concern! At Senior Benefit Advantage, we help our clients better access their medications through connecting them to programs that make their prescriptions more accessible and affordable to them. We also strive to be a source of information to our clients and our community regarding changes to Medicare and the impact those changes may have on you.” – Rhonda Kraus (Owner and Director of Client Services of Senior Benefit Advantage, LLC.)

The Road So Far and What Lies Ahead

Let’s start with what we know about Medicare Drug Coverage today. In 2024, Part D coverage consists of four phases: the deductible phase, the initial phase (co-pay phase), the coverage gap (donut hole) phase, and the catastrophic phase. During the Coverage Gap or donut hole phase, someone taking a costly brand name drug would pay 25% for that drug while in the donut hole. Once their total drug cost reaches $8000, also known as TrOOP (True Out of Pocket) cost, they exit the donut hole and enter the Catastrophic Phase. In 2024, all prescriptions in the Catastrophic Phase cost $0 copay. Medicare beneficiaries who qualify for Extra Help and Low-Income Subsidy are not subject to the coverage gap, their Part D premiums are subsidized, and deductibles are waived.

In anticipation of plan year 2025, there is a lot of buzz about the impact of the Inflation Reduction Act of 2022 on Drug Coverage and what plans in 2025 will look like as a result. The Inflation Reduction Act (IRA) has imposed a maximum out-of-pocket limit (RxMOOP) – that a person will pay each year for Medicare Part D prescription drugs covered by their Part D drug plan (either a stand-alone Medicare Part D prescription drug plan, (PDP) or Medicare Advantage plan that includes drug coverage, (MAPD). In 2025, the RxMOOP limit is $2000. The RxMOOP limit can change year to year based on inflation and economic conditions.

Of course, we will not know until October 1st what the new plans will look like, but I can share with you some basic facts regarding the new drug coverage rules being implemented in 2025 from the Inflation Reduction Act (IRA).

The New Rules for 2025 Drug Coverage

In 2025, Part D Coverage will consist of 3 phases: Deductible Phase. Initial Phase, and Catastrophic Phase. The standard Drug Deductible in 2025 will be $590. During the Initial Phase, a beneficiary will pay 25% of the cost of the drug, and when their out-of-pocket costs reach $2000, they will enter the Catastrophic Phase and pay $0 for their prescriptions for the remainder of the year. There will no longer be a Coverage Gap and Medicare beneficiaries will not pay more than $2000 for prescriptions in 2025. They will also have the option of spreading their prescription cost evenly throughout the year via a new program called the Medicare Prescription Payment Plan.

The Medicare Prescription Payment Plan is a program in which CMS is mandating the insurance carriers (Plan Sponsors) to pay your pharmacy bill up front and bill you each month on a pro-rata basis that divides the amount you owe for prescriptions up to $2000 (RxMOOP) by the number of months left in the year. This program is optional for every Medicare Beneficiary and can be opted into or out of at any time of the year. It is credit, and if someone defaults, it will be collected as medical debt. An individual participating in this program will not be disenrolled from their insurance plan if they fail to pay. However, after a two-month grace period, they can be disenrolled from the Medicare Prescription Payment Plan. I am sure you will start to receive a lot of information regarding the new rules and changes to Drug Coverage in 2025 around September this year. Senior Benefit Advantage will be announcing Educational Meetings regarding Drug Coverage in 2025 to be held at the Village Inn and Suites and, also the Coshocton Library. Please stay tuned for dates and more information!

As Always- Thank you for choosing Senior Benefit Advantage as your Local Medicare Advisors!