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The Centers for Medicare & Medicaid Services gives us a sneak peek at some of the changes you can expect to see in Medicare Part D in 2025. The Medicare rules from the Inflation Reduction Act of 2022 also go into effect, changing how you pay for drugs in 2025.
Each year, the Social Security Administration determines the costs associated with the Medicare program. It then increases or decreases premiums and deductibles using rules set forth in the Social Security Act. The CMS is expected to flesh out the Medicare 2025 changes in the coming weeks and months.
We’ll continue to provide updates as more plan details for 2025 are released, but below are some of the changes you can expect. For more information, here’s the Social Security payment schedule and four ways you could lose your Social Security benefits.
When will we hear more about the changes to Medicare Part A?
Part A helps pay for the inpatient care you receive in hospitals, critical access hospitals and nursing facilities. Nearly 99% of Medicare beneficiaries get Part A for free because they paid Medicare taxes while they worked, according to the Centers for Medicare & Medicaid ServicesLast year, on October 12, 2023, CMS announced the 2024 changes to Part A.
When will we hear more about the changes to Medicare Part B?
Part B covers medical services such as physician services and outpatient care. Part B is optional, and for 2024, the Part B premium is $174.70 per month. CMS announces annual changes to Part B in the fall, so we’ll have to wait a while before we get the full details for 2025.
Medicare Part C
Medicare Advantage, or Medicare Part C, will also get some updates. Part C plans come from private companies and can offer additional coverage, such as vision, hearing, dental, and health and welfare programs.
The price for this alternative varies depending on the plan you choose. An upcoming change to Part C will remind enrollees what they may be leaving on the table. For Medicare Advantage enrollees, starting in 2025, a semiannual notification will let you know about any unused benefits that are available and available to you.
This will remind you to use your benefits and reevaluate whether you need the specific plan they signed up for. When it comes time to re-enroll, you can make a more informed decision about whether to stay with your current plan or switch to a new one.
Medicare Part D Changes for 2025
Part D can help cover the cost of prescription drugs. So, what’s new with Medicare Part D for 2025? The Inflation Reduction Act brings a bunch of changes to Part D plans this year. We’ll explain.
According to CMS, the basic Part D beneficiary premium will increase by $2.08, or 6%, from $34.70 to $36.78. The IRA will add a 6% cap to basic Part D plans, but actual premiums could vary. CMS said it will release preliminary Part D premium averages later this summer.
New $2,000 deductible caps for medications
A big change in 2025 for Plan D participants is the $2,000 per year maximum out-of-pocket for medications. This change could have big benefits for participants who need to take expensive medications monthly.
Please note that medications covered under Medicare Part B do not count toward this maximum. These medications are typically provided by a physician or healthcare provider in a facility.
The coverage gap (donut hole) will disappear in 2025
In 2024, there were four levels of coverage. Deductible, Initial, Coverage Gap (known as the donut hole), and Catastrophic. The coverage gap is a temporary limit on what the drug plan will cover for drug costs. In 2025, Medicare will eliminate the donut hole coverage gap, further simplifying coverage. Now, with the new $2,000 deductible, Plan D participants will have to pay their deductible (up to $590) and then make co-pays until they reach the new maximum, advancing to the next level of coverage more quickly than in previous years.
New Options for Drug Payment Plans
A new payment plan option allows people to pay for their medications throughout the year in the form of a payment plan instead of up front. The new plan allows someone to sign up for this payment plan and spread out the payments over the remaining months of the year, and payments cannot exceed a certain amount. The payment plan is opt-in only.
