How Medicare Drug Coverage Changes Will Impact You in 2025

Medicare Part D is an optional prescription drug benefit provided through private insurance companies. These Part D insurance plans help cover the cost of prescription drugs for more than 50 million older adults and people with disabilities. While Part D plans provide much needed coverage for prescription drugs, many Medicare beneficiaries find it difficult to afford their plans out-of-pocket costs. When people face challenges in paying out-of-pocket costs, they sometimes end up trying to stretch medications by cutting pills in half, skipping doses, or deciding not to fill a prescription. Unfortunately, this can be harmful to their health. Recently, Congress made changes to Medicare Part D to help beneficiaries manage these out-of-pocket costs and better afford their medications. In 2025, there will be an annual out-of-pocket maximum, or limit, on the amount a person with a Medicare Part D plan will have to pay. That maximum is $2,000 a year. Also, a second new benefit, called the Medicare Prescription Payment Plan, allows beneficiaries to opt-in to a payment plan to spread out their costs up to the new $2,000 maximum limit into monthly installments with no interest or fees. So instead of paying the total out-of-pocket cost for a prescription medication at the pharmacy counter or wherever one gets their prescriptions, that cost can be spread out into smaller monthly payments over the year. And it doesn't cost anything to take advantage of this payment option. While this program won't change the out-of-pocket cost for certain medications, it can help make those costs more manageable by spreading them over monthly payments. This may be especially helpful when paying for costlier medications. Anyone enrolled in a Medicare Part D insurance plan, Medicare Advantage Plan that includes prescription drug coverage, or Employer Group Waiver Plan can take advantage of this new benefit. However, it's really important to know that participation is voluntary and not automatic. In order to take advantage of this payment plan, you must sign up for the option each year with your Part D plan. You can sign up for the payment installment program at any time during the year, including open enrollment. Make sure you opt-in at least 24 hours before picking up your first medication that you want to spread out the costs for. This is important because you cannot sign up at the pharmacy counter. It's also helpful to sign up earlier in the year since that will give you more time to spread out your costs. To get an idea of what you would pay each month if you opt-in, visit your Part D plans website or go to medicare.gov to access a monthly cost calculator tool. You can also contact your Part D plan directly for more information. Once you decide to participate, you won't pay anything at the pharmacy counter when you pick up your prescription medication. Instead, you'll be billed later by your Part D insurance plan and will pay in interest-free monthly installments. Keep in mind, if you miss or don't make a payment, you could be at risk of being removed from the program. If this happens, any remaining unpaid balance will still need to be repaid. However, participation in the payment program will not impact your Medicare prescription drug coverage. These new changes can make it easier for you to pay for your prescription medications. Just like other benefits of Medicare, it is your right to participate in this program. Talk to your Medicare Part D insurance plan provider to learn more about the Medicare Prescription Payment Plan and other programs that can make medications more affordable. To learn more, visit www.loweroutofpocketcosts.org.