Major Changes Coming To Medicare Prescription Drug Plans in 2025

Buckle up Medicare Beneficiaries...Big changes are coming to Medicare in 2025! Most notably to Prescription Drug Plans (PDP's), otherwise known as Medicare Part D.

Here's the Readers Digest version of what we believe you can expect in 2025....

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1. The Coverage Gap Phase "Donut Hole" Will Be Eliminated

Out-of-Pocket drug spending will be capped at $2,000

This is great news for Medicare beneficiaries who take only brand-name prescription drugs and have drug costs high enough to reach the catastrophic threshold. Beginning in 2025, Part D enrollees who take only brand-name drugs and reach the annual out-of-pocket costs at the catastrophic threshold, your cost will fall from around $3,300 in 2024 to $2,000 in 2025. An average savings of approximately $1,300 in 2025 compared to what you spent in 2024.

2. Part D Plans & Drug Manufacturers Will Assume A Larger Share Of Costs For Catastrophic Coverage, While Medicare Will Pay A Smaller Share

Beginning in 2025, Medicare’s share of total costs in the catastrophic phase will decrease from 80% to 20% for brand-name drugs and from 80% to 40% for generic drugs.

Also, companies offering Medicare Part D plans’ share of costs will skyrocket from 15% to 60% for both brands and generics above the cap, and drug manufacturers are mandated to provide a 20% price discount on brand-name drugs.

The following chart details the shift in financial responsibility, from 2023 to 2025, from Medicare to companies offering prescription drug plans:

Ultimately, we believe, companies offering Medicare PDP's will have no intention of absorbing the entire brunt of this shift in financial burden. It is our view the added cost to companies offering PDP's may ultimately be passed on to Medicare beneficiaries in the form of significantly higher PDP premiums in 2025!

We'll update this post as soon as additional information becomes available.

In the meantime, if you would like more information on how these changes will impact YOU in 2025, feel free to give us a call...941-706-3500.

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