Final Calendar Year 2025 Part D Redesign Program
For the first time in Medicare’s history, the amount of money that beneficiaries enrolled in Part D drug plans will have to pay for their prescriptions each year will be capped at $2,000. Under the redesigned benefit, beneficiaries will no longer have to navigate multiple coverage phases when filling their prescriptions. Instead, they will have a single benefit phase (after meeting a deductible if their plan has one) until they reach their annual out-of-pocket spending limit of $2,000.
Overview of Changes to the Part D Benefit:
- A newly defined standard Part D benefit design consisting of three phases: annual deductible, initial coverage, and catastrophic coverage
- A lower annual out-of-pocket threshold of $2,000
- The sunset of the Coverage Gap phase
- This out-of-pocket limit applies if you get your prescription drugs through a stand-alone Part D Plan you added to original Medicare, or if you access your Medicare benefits through a Medicare Advantage Plan (Part C) that has Part D drug coverage embedded as one of the benefits.
- The amount of the cap could change from year to year. If what Medicare Part D spends on prescription drugs per enrollee increases, that $2,000-a-year cap could also rise in future years.
- If your Part D or Medicare Advantage Plan has a prescription drug deductible, that deductible amount will count toward the cap. In 2025 the calendar year drug deductible is $590.00. Some plans have lower deductibles or even no deductible.
- Enrollees will be able to opt into the “Medicare Prescription Payment Plan” to have out of pocket costs spread out over the plan year.
The last bullet point provision added to the Medicare drug benefit that begins in 2025 is the requirement that Part D Plans offer enrollees the option of opting into the Medicare Prescription Payment Plan for the 2025 plan year. Part D enrollees can opt in during the Medicare Annual Enrollment Period (AEP) and will also have the opportunity to opt in throughout the year. This means you will have the option to pay out-of-pocket costs in monthly payments spread out over the year rather than requiring payment in full at the pharmacy counter each time you fill a prescription.
Due to the enactment of this new legislation, plans will be required to manage the higher cost share brought about by these changes which may result in new parameters including higher premiums, fewer plan choices, stricter formularies & drug utilization reviews.
For more information and guidance, please contact a licensed agent at Terri Yurek Insurance Services (858) 391-8544.