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