Author: Sakeena

CMS (Centers for Medicare and Medicaid Services) has released the new costs for premiums and deductibles for 2025 Medicare coverage. Each year, costs are adjusted, deductibles and premiums re-set and released to the public. For the 2025 plan year the following costs will be in place for Original Medicare:

Part A Deductible: $1676 per hospital admission (unless within the same 60-day period)

Part B Premium: $185.00/month

Part B Deductible: $257/year

Part B Coinsurance: 20% (remains the same)

Part D Deductible: $590/annual– paid before prescription drug cost share begins**

Part D Initial Drug Phase: up to $2000 in out-of-pocket expenses

IRMAA – applies to single HH earning $106K or married HH earning $212K

Social security COLA Increase for 2025: 2.5%

**NEW for 2025 – There is a new Medicare Payment Plan M3P available to help spread out the costs of your prescription medications over a 12-month payment plan. Members of plans can enroll in the Rx Payment Plan beginning December 8 – 31 for Jan 1 2025 start. Enrollment in the payment plan is optional and administered directly by your MAPD/PDP carrier (NOT your pharmacy). Enroll directly with your carrier between December 8-31.

***NEW for 2025 – The Gap or Donut Hole phase of the Medicare Prescription Drug Plan has been eliminated for 2025. Catastrophic phase begins once you have incurred $2000 in out-of-pocket drug costs. Costs go to $0 during the Catastrophic phase. 2025 Drug plans now have 3 phases: Deductible, Initial, Catastrophic.

For most Rx plans in 2025:

Deductible: $590
Initial Phase: 25% cost share for medications until you reach $2000 in costs
Catastrophic: $0

Medicare resets its costs annually. These changes will take place beginning January 1, 2025 through December 31, 2025.

There have been a lot of changes underway with Medicare as a result of the Inflation Reduction Act signed in August 2022 by President Biden – the law expands Medicare benefits, lowers drug costs and has been enacted with the goal of improving the viability of the Medicare program for generations to come.  Short term, the law will help with reducing prescription drug costs.  A debilitating issue for so many on Medicare. 

A major aspect of the new law provides medicare the ability to negotiate drug prices directly with manufacturers to help gain control of the spiraling costs consumers are subjected to with many name brand medications. 

Now, we have the first 10 medicines that will be subject to Medicare price negotiations:

Januvia – Diabetes 
FIasp   –  Diabetes 
Novolog – Diabetes
Farxiga  – Diabetes, Heart Failure, Kidney Disease
Enbrel – Rheumatoid Arthritis, Psoriasis
Jardiance – DIabetes, Heart Failure, Kidney Disease
Stelara  –  Psoriasis, Crohn’s Disease, Ulcerative Colitis
Xarelto – Blood clots, coronery or peripheral artery disease
Eliquis – blood clots
Entresto – Heart Failure
Imbruvica – Blood Cancers

On average the cost reduction is approximately 60% with many higher and a few lower.  New pricing will begin January 1, 2026.  The new pricing is forecasted to save consumers an estimate $1.5 Billion in out of pocket costs and approximate $6 Billion to the Medicare program savings.  Negotiations began in February 2024 and concluded August 2024.

The Centers for Medicare and Medicaid (CMS), the federal agency that administers the Medicare program, announced sweeping changes to Medicare Prescription Drug plans for 2025.

Many of these updates are a direct result of the Inflation Reduction Act of 2022, a landmark United States federal law, which had a key provision to lower the cost of prescription drug prices.

Part D Prescription Drug Cost Share has been streamlined to 3 phases:
Annual Deductible – in 2025 the deductible is $590 (some plans will have a $0 deductible). You pay 100% of drug costs until deductible is met.
Initial Coverage – 25% co-insurance on medicine costs
Catastrophic Coverage – $0 med costs once your costs reach $2000

Medicare is capping your out-of-pocket costs for prescription medicines at $2000 in 2025!!!! This is a game-changer.

Medicare Prescription Payment Plan (M3P):

For the first time, Medicare will allow you to pay your out-of-pocket prescription medicine costs in monthly amounts spread thoughout the 2025 plan year, rather than paying your full cost share at the pharmacy. With this program, you will pay the carrier direct through a monthly bill/payment plan. And will pay nothing at the pharmacy. Medicare enrollees should contact their carrier directly to enroll in the program before January 1, 2025.

Enrollees can opt out of the program at any time. However, they will continue to be billed monthly for any cost-sharing amounts still owed.

Failure to pay will result in disenrollment from the prescription payment program (not the plan) after a specified grace period. Once an enrollee leaves the program they will resume their out of pocket cost sharing at the pharmacy.

What counts towards the $2000 maximum Out-of-Pocket???

Any money spent during the deductible and initial coverage stages will apply. Premiums for prescription drug plans will NOT apply.

As a result of this change, plans will modify their formularies, so it is important to re-look at your prescription drug coverage and make sure your medicines are on the plan formulary.

Remember, Annual enrollment begins October 15 – December 7. You can set up an appointment beginning October 1 to look at new plan costs and formularies. All of the new changes will take effect beginning January 1, 2025.

To set up an appointment for Annual Enrollment Period Click Here