Medicare Part D plans are stand-alone prescription drug plans for those with original Medicare. Part D coverage is sold by private companies. Several big changes are coming to Part D in 2025 due to the Inflation Reduction Act, enacted in 2022. Whether you are already enrolled in a Part D program or considering enrolling for the first time, you should be aware of these important changes as you evaluate which Part D program is most beneficial for your needs going forward.
Cap on Out Of Pocket Costs for Approved Drugs
Effective January 2025, there will be a $2,000 cap on the amount a Part D enrollee will pay out-of-pocket for prescription drugs. The cap applies to those medicines that are on your formulary. The cap also applies to people whose prescriptions are covered through a Medicare Advantage plan. The deductible in 2025 will be $590.
Annual Premium Increase Limits
Increases in Part D premiums are limited to no more than 6% annually. The cap is indexed to inflation. That limit remains in place through 2029.
Introducing the Medicare Prescription Payment Plan ("MPPP")
If you have a stand-alone Part D plan, next year you will have the option to smooth out your payments by enrolling in the Medicare Prescription Payment Plan. The MPPP program gives you the option to pay for your prescription drugs in monthly installments, rather than absorbing the cost all at once at the pharmacy. It could be particularly helpful to those who need very expensive prescriptions. It is important to note that the MPPP program does not actually decrease your costs; it merely gives you a way of paying over time.
You will need to opt into the MPPP program and, if you choose to opt into the MPPP program, you will receive a monthly bill from your Part D plan.
Time to Evaluate Your Part D Plan for 2025
Medicare Open Enrollment is from October 15 to December 7, 2024.
This is the window when you can make changes to your coverage. Now is the time to evaluate your choices, taking into consideration all the changes coming in 2025. If you switch plans you do not need to cancel the existing plan; this will occur automatically. You should consider if you have any current health conditions and what new prescriptions you may need in 2025. You may want to check each plan's formularies and tiers as covered prescriptions can change from year to year. You may also want to check if your local pharmacy is in the plan’s network (if so, this could be a cost savings for you!).
To check for the Medicare plans available in your area, click here. You can also get additional information about Medicare and available coverage here.
