In this class, we explored the significant changes to Medicare coming in 2025 as a result of the Inflation Reduction Act. These changes will impact both Medicare Advantage plans and standalone prescription drug plans, and they offer substantial savings and more predictable costs for beneficiaries.

Key Takeaways and Next Steps:

$2,000 Maximum Out-of-Pocket Cap

Starting in 2025, Medicare plans will have a $2,000 annual out-of-pocket maximum for prescription drugs, dramatically lowering costs from the current cap of $8,000.

Elimination of the Donut Hole

The coverage gap, commonly known as the “donut hole,” will be eliminated, which means beneficiaries will no longer face a sudden increase in drug costs after reaching a certain spending limit.

Coinsurance and Manufacturer Discounts

For most plans, beneficiaries will pay 25% of drug costs in the initial coverage phase, and after reaching the out-of-pocket maximum, their coinsurance will be 0%. Additionally, drug manufacturers will provide a 10% discount on brand-name drugs during the initial coverage phase.

Monthly Installment Payment Option

A new option will allow you to spread out payments throughout the year, making budgeting for prescription drug costs easier and more predictable.

Review Your Plan and Formulary

Be sure to review your plan's annual notice of change and the 2025 formulary to ensure your medications are still covered or explore alternatives with your healthcare provider.

These changes aim to make prescription medications more affordable, helping you maintain your health by adhering to your prescribed treatments.