Part D 2025 Surpises!

There are great changes coming to Part D in 2025!

What is Part D?

Part D are prescription drug plans because most prescription drugs are not covered by Original Medicare. Historically there have been 4 stages of Part D:

• Deductible
• Initial Coverage Phase
• Coverage Gap
• Catastrophic Coverage

These are changing in 2025!

Basically, these are just financial thresholds. The government sets a maximum amount for a deductible that any plan can require before you move into the initial coverage phase. Then you would be responsible for a copay or coinsurance for your prescription based on the tier. Medicare would keep track of your spending until you reached the dreaded donut hole or coverage gap at which point your costs would likely increase. And if you kept spending you might reach catastrophic coverage at which point your copay or coinsurance might decrease dramatically or be eliminated entirely.

The five tiers of medication could vary by plan, but often there were five of them with preferred generics being the least expensive and specialty medications being the most expensive. Prices could also vary whether the pharmacy was in or out of network or whether you chose a mail-order pharmacy. Much of this information and covered prescription drugs can be found on medicare.gov and on your plan’s formulary. 

Confusing? Absolutely. But things are going to get easier and probably much cheaper in 2025!

Bye Bye Coverage Gap!

First and foremost the dreaded coverage gap is gone! In years past once you maxed out your spending in the initial coverage phase, you would move into the coverage gap or donut hole. Your coinsurance would then increase to 25% of the drug’s cost which could be extremely costly and also confusing. People could go from paying a few dollars one month to over a hundred the next!

The government has been trying for years to rectify this unfortunate situation and in 2025, the coverage gap is finally gone! That means if you max out your initial coverage phase you’ll move directly into what would have been the catastrophic coverage phase.

Catastrophic Coverage

More excellent changes here. There have been steady improvements with the biggest one coming in 2025. In years past, once you met the threshold for catastrophic coverage which could be 6, 7 or even 8 thousand, your copays or coinsurance would decrease down to 5%. However, if you had a specialty medication that could cost hundreds of dollars, you’d still be left with a big bill.

In 2024, catastrophic coverage was changed. If you met the 8K threshold you would have no more bills for prescription drugs for the rest of the calendar year.

But 8K is a LOT.

In 2025, it has dropped to 2K.

So to summarize, once you have met your deductible (more on that in a moment), you’ll move into the initial coverage phase. Prescription drug costs will be based on the tier with lower tiers usually being the least expensive. And if you spend 2K, that’s it for your yearly drug spending. 

Deductible & Premiums

Now some costs will likely be going up. For example, the deductible in 2025 is expected to be $590 which is up from 2024’s $545. But that usually happens every year. Also, plans can choose to offer lower deductibles to entice beneficiaries. Those plans often have higher monthly premiums because there is often an inverse relationship between premiums and deductibles.

Premiums are also expected to increase by about 7.5%. That being said, remember, that Part D plans can be rather inexpensive. There are plans offered for less than $10 per month, so no need to break the bank. 

Insulin & Vaccines

There have been changes in recent years with regard to insulin and vaccines. Insulin covered by Part D has been capped at $35 for a 30-day supply for both Part D and MA plans. 

Additionally, your Part D plan won’t charge you a copayment or apply a deductible for vaccines that the Advisory Committee on Immunization Practices recommends

Lower Costs

For the first time, Medicare will be able to negotiate directly with manufacturers for the price of certain brand-name Part D medications.

• The first 10 drugs selected for negotiation are:
• Eliquis
• Jardiance
• Xarelto
• Januvia
• Farxiga
• Entresto
• Enbrel
• Imbruvica
• Stelara
• Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill

Those who do not follow the negotiations will be subject to a hefty tax or penalty.

Extra Help

The Extra Help program offers assistance with Part D premiums and copays for those with lower incomes. The Part D Low-Income Subsidy (LIS) program will expand to cover more drug costs for people who earn less than 150% of the federal poverty level

If you qualify for the Extra Help program generics are capped at 4.50 and $11.20 for brand name medications.