Major changes are coming in 2025 to Medicare’s prescription drug program, Medicare Part D.
Planning ahead could have positive impacts on your pocketbook, according to Jack Arnett with Sanford Health Plan. Align powered by Sanford Health Plan offers Medicare Advantage options available in select counties within Iowa, Minnesota, North Dakota and South Dakota.
“Since the advent of Part D in 2006, this is the biggest change that I have personally seen,” said Arnett, who’s celebrating 25 years in the industry.
“Out-of-pocket costs for Medicare beneficiaries in 2025 are going to be capped at $2,000,” Arnett said. “That’s the most any Medicare beneficiary is going to pay out of pocket for their prescriptions.”
Find a trusted adviser
For people needing high-cost prescriptions, Arnett thinks this will be a welcome change. Maybe the most significant is how the Inflation Reduction Act will simplify Medicare prescription coverage by eliminating the coverage gap discount program, known as the “doughnut hole.”
“Unfortunately, some people have to make the determination of prescriptions over rent or meals or other financial responsibilities,” said Arnett.
“Capping that max out-of-pocket at $2,000, many Medicare beneficiaries that are what we call high utilizers, or those high-cost-drug users, are now going to be able to afford them and maintain that drug regimen.”
That $2,000 can also be spread out into monthly payments. Taking the monthly payment route means you won’t have anything to pay when visiting the pharmacy.
“Now is the time to start asking questions,” said Arnett, who encourages people to find a trusted adviser when shopping for Medicare Part D or Medicare Advantage plans (Part C) that include Part D. “Someone who’s been in this industry. Someone who works in this industry continually.”
Top five questions to ask your agent
- How will the Part D changes affect what I pay for prescriptions, like deductibles and co-pays?
- Are there different Part C plans with Part D coverage that I can choose from?
- What are the costs for the prescription coverage you’re suggesting?
- Are there any rules or limits I need to know about if I switch to a different Part D or Part C plan?
- Will my medications be covered by the Part D or Part C plan you’re recommending?
Be aware of extra costs
Arnett urges those still working past the age of 65 to dive into their employer’s coverage. If it isn’t creditable coverage and you don’t act, you may be assessed a penalty. Creditable prescription drug coverage is coverage expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.
“Because of these changes to Medicare’s prescription drug coverage, many employer groups that have prescription coverage may no longer be creditable coverage. Medicare states that if you don’t have creditable coverage and you don’t enroll into a Part D plan, you may be assessed a penalty. Now that penalty isn’t that significant, but it stays with an individual for life,” Arnett said.
Check in with your human resources representative or with licensed agents from Sanford Health Plan to find out.
“Very, very important that people start at least getting their minds wrapped around these huge changes for 2025,” Arnett said.
There is still time. The annual open enrollment period where people can shop for Medicare Part D or Medicare Advantage that has Part D included begins Oct. 15 and ends Dec. 7.
Be sure to have your list of prescriptions while shopping. Get your questions answered by calling Sanford Health Plan or visiting the Align powered by Sanford Health Plan website.
Align powered by Sanford Health Plan is a PPO with a Medicare contract. Enrollment in Align powered by Sanford Health Plan depends on contract renewal. Sanford Health Plan complies with applicable federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability or sex.
Learn more
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