For the first time, beginning in 2025, the drug law, known as the Inflation Reduction Act, requires all Medicare prescription drug plans (Medicare Part D plans) including both standalone Medicare prescription drug plans and Medicare Advantage plans with prescription drug coverage to offer enrollees the option to pay out of pocket prescription drug costs in the form of capped monthly installment payments instead of all at once at the pharmacy. Here are some details of what to expect for the upcoming year:
Out-of-pocket drug spending cap: In 2025, enrollees will have a $2,000 annual cap on out-of-pocket prescription drug costs. After reaching this cap, enrollees will pay nothing for Medicare covered Part D drugs for the rest of the plan year.
Coverage phases: There will be three Part D coverage phases: deductible, initial coverage, and catastrophic.
Cost sharing: In the initial coverage phase, enrollees will pay 25% of costs, and manufacturers will provide a 10% price discount. In the catastrophic coverage phase, plans will pay 60% of costs, and manufacturers will provide a 20% price discount.
Monthly installment payments: Enrollees will be able to pay out-of-pocket costs in capped monthly installments instead of all at once at the pharmacy.
Insulin: Insulin will be available at $35 per month per covered prescription. Vaccines: Recommended adult vaccines will be available without cost-sharing.
Low-income subsidy program: The low-income subsidy program (LIS or “Extra Help”) will be expanded to 150% of the federal poverty level.
If you need assistance in evaluating your current plan, please reach out to me for a free consultation as I’m here to help you navigate and find the most appropriate plan which fits your needs.
