Policy Spotlight: Medicare Changes in 2025
As a result of the Inflation Reduction Act of 2022, several big changes are coming to Medicare in 2025.
Medicare Part D: Out-of-Pocket Costs Cap
Currently, Medicare Part D operates through four phases:
1. Deductible: You pay the full negotiated cost of your medications until you reach a deductible of $545.
2. Initial Coverage: After you meet your deductible, your plan will help pay for your covered prescription drugs. You pay copayments.
3. Coverage Gap ("Donut Hole"): Once your total drug spending reaches $5,030, copayments increase from what they were in the initial coverage phase.
4. Catastrophic Coverage: Once your total drug spending reaches $8,000, there is no cost-sharing for covered drugs during the remainder of the year.
Starting in 2025, the model will change: Part D plans can have a deductible of up to $590, and copayments will apply until your total out-of-pocket costs reach $2,000.
Since insurance companies will have to offset the cost of this new model, anticipate significant variations in premiums, copayments, and covered drugs this annual enrollment season.
With all these changes, now is the perfect time to schedule an appointment with The Senior Alliance's Michigan Medicare Assistance Program. Our unbiased service offers free plan reviews to help you make informed decisions. Call our team at (734) 727-2067 to schedule your appointment today!
Midyear Statement from Your Medicare Advantage Plan
In 2022, over 99% of Medicare Advantage plans offered at least one supplemental benefit. While these benefits are often what gets people to sign up for a certain Advantage Plan, the benefits utilization rate is often very low. To ensure that taxpayer dollars are effectively spent and not just used for marketing rarely accessed benefits, CMS is now requiring Medicare Advantage plans to send a personalized "Mid-Year Enrollee Notification of Unused Supplemental Benefits" each year between June 30 and July 31. This notice will provide the enrollee with a list of their unused benefits from the first six months, along with details on each benefit's scope, cost-sharing, access instructions, and network information.
Medicare Part D: Payment Plan
Many seniors face high prescription costs, with roughly one-third struggling to afford their medications. Starting in 2025, beneficiaries will have the option to spread the cost of their medications over several months instead of paying the full amount at the pharmacy. After enrolling in the plan, the beneficiary's Part D sponsor will inform any pharmacy that fills their prescription they won't be paying anything at the register. Instead, the enrollee will receive monthly bills from their plan sponsor.
