If you are confused by the changes for Medicare 2025, join the club.
Key Takeaways for 2025
- Prescription plans will change significantly.
- Your annual plan change notification provides all the details.
- Medicare Plan Finder lists expenses. A few plan rules will alter.
- Medicare Advantage enrollees can compare with their tool.
- Help is available for key decisions.
Be prepared for one of the biggest Medicare prescription medication program modifications ever: The maximum out-of-pocket expenditure for approved medications will be $2,000 in 2025.
Independent Part D and Medicare Advantage (MA) medication plans are subject to the new cap. This move is affecting other prices and coverage.
CMS announced that typical monthly costs for stand-alone Part D plans will be $40 in 2025, down $1.63, and Medicare Advantage plans will be $17, down $1.23. Only part of the picture.
“Formularies, pharmacy networks and cost sharing for prescriptions may change even if premiums do not,” says Commonwealth Fund Medicare vice president Gretchen Jacobson. The New York charity funds health policy studies. She advises checking if your current plan will still cover your prescriptions at your preferred drugstore next year.
Before the $2,000 ceiling, several insurers are boosting premiums, prior permission requirements for more drugs, and deductibles and copayments. The cap applies to out-of-pocket expenditures for covered prescription medications, not premiums or non-formulary drugs.
Medicare Advantage programs may make other small changes:
- Higher specialist and hospital copayments.
- Network providers vary.
- Dental coverage is reduced.
- Maximum medical out-of-pocket costs.
New benefits like chronic condition coverage may cut long-term health care expenses.
CMS officials said 60 percent of Medicare Advantage customers who stay in their current plan will pay no MA premium next year beyond the Part B and possibly Part A monthly fees that apply to original Medicare and Medicare Advantage plans.
Plan coverage details vary widely. This year, don't let your policy run automatically.
Choose the right package for your needs with these five steps.
1. Review your plan's yearly change notice.
This mandatory insurer document should have arrived by September's end. Your plan's premium, deductibles, copayments, out-of-pocket expenditures, provider network, and preferred pharmacies will change.
2. Compare Medicare Plan Finder alternatives.
This Medicare.gov tool simplifies comparing local plans. Enter your zip code, medicines, doses, and preferred pharmacies to view plan premiums, deductibles, and pharmaceutical expenses.
Monthly premiums alone could vary greatly. Chicago has zero to $125.80 stand-alone Part D plans, while Tampa has zero to $167.
In the Plan Finder, compare your plan's 2025 total costs to its competitors. Click Lowest medicine + premium cost to select plans by lowest premiums, deductibles, and copayments.
Low premiums may appeal to those who take few low-cost drugs. You won't exceed the cap because the premium isn't included in the $2,000 computation.
You may reach the cap rapidly with expensive prescriptions, but a modest premium should still matter.
If you fall between the two extremes, compare prices and make sure your prescriptions are covered. They won't count toward the $2,000 cap.
Chicago residents taking Enbrel, a pricey rheumatoid arthritis medicine, may expect the zero premium plan to impose the maximum $590 deductible. Once you hit $2,000, you'll pay nothing more for the year.
On top of the cap, a $102 premium plan will cost over $1,200 per year.
The Plan Finder predicts that a $20.90-a-month plan without Enbrel would cost $84,480 in premiums and medication.
Seattle-based Milliman consultants senior consulting actuary Kevin Pierce said, “Some beneficiaries could be facing material premium increases or have their plan terminated or shifted into another.” “Other beneficiaries could see no premium change or reduction.”
A KFF analysis indicated that in California, eight of 16 national Part D plans provided in 2024 will increase premiums by $35 if they don't switch plans in 2025, while six other plans will decrease costs. Most stand-alone Part D plans engaged in a voluntary scheme where CMS awarded plan sponsors extra money provided they capped premium increases at $35 or less for 2025. Program duration is at least three years.
3. Discover coverage limitations
A formulary medicine may not be covered automatically.
Even if your doctor prescribes Ozempic or Mounjaro, your plan may require prior authorization because these medicines are approved for diabetes but not weight reduction. Step treatment may require you to try a cheaper medicine first.
How Are Original Medicare and Medicare Advantage Different?
4. Study Medicare Advantage plans.
Medical copays. Use Plan Finder to compare prescription costs and learn about medical coverage if you have an all-in-one Medicare Advantage plan. Doctor and specialist copayments, common medical charges, and hospital stays are shown under Plan Details.
Your payment limits. Compare plans' maximum out-of-pocket spending. This only covers Part A and Part B medical coverage, not Part D medications or supplementary benefits.
Copays for extras. Coverage may include dental, hearing, transportation, and vision. For details, see a plan's summary of benefits on its website, referenced under its ID in the Plan Finder. Look for annual coverage limits and copayments.
Chronic illness management. Chronically ill people may receive grocery allowances and nonmedical transportation.
Your suppliers. Check your plan's provider network for doctors and facilities. Find out if an out-of-network provider is covered and how much it costs.
Ask your doctors about participation in the initiatives you're considering. Find a plan by name; some companies have multiple in a region with various provider networks. Plans may have a supplier list on their website.
5. Get decision-making help
Many resources can help you choose during open enrollment.
Call 800-MEDICARE (633-4227) or chat at Medicare.gov.
