The changes to Medicare Part D in 2025 bring significant benefits that enhance access to affordable prescription medications. One of the most notable updates is the introduction of a $2,000 annual out-of-pocket limit on drug costs. Additionally, the new Medicare Prescription Payment Plan allows for the spreading of out-of-pocket costs over the calendar year, helping to manage monthly expenses without reducing overall drug costs. This option is especially beneficial for those on a tight budget, as it alleviates the financial burden of large, unexpected bills.
New! Out-of-Pocket Limit on Drug Costs
Starting in 2025, your annual out-of-pocket drug expenses will be capped at $2,000. Once you reach this limit—calculated from your out-of-pocket spending and certain payments from others, including Medicare’s Extra Help program—you won’t have to pay copayments or coinsurance for covered Part D drugs for the remainder of the year. This cap provides peace of mind for people with high drug spending, ensuring that people won’t face overwhelming expenses after reaching this threshold, making budgeting for healthcare easier. Note: If you receive Extra Help, some Part D costs may not apply to you.
New! Medicare Prescription Payment Plan
Beginning in 2025, a new payment option will be available to help you manage your out-of-pocket drug costs by spreading them throughout the year (January–December). While this option can help you manage your expenses, it does not reduce your overall drug costs. If you choose this plan, you’ll continue to pay your monthly premium (if applicable) and receive a bill from your health or drug plan for your prescriptions instead of paying at the pharmacy. All plans offer this option, and participation is voluntary with no associated costs.
What does this mean for you?
Simply, you can now better budget your monthly drug and premium expenses with the peace of mind that your prescription cost won’t be more than $2000 total for the year.
What should I do?
Make sure you shop for yourself or have a licensed agent help you compare all the plans available in your area to help you find the lowest cost plan for you based upon the medications you take and the pharmacy you use. No two plans are the same and minor differences in pharmacy choice and medication can result in big savings.
You can shop for plans yourself through Medicare Insurance Direct.
If you’d like free assistance from a Licensed Agent call Dan M. Wahba, CFP at 877-565-4728 or complete the form below to be contacted.
