In 2025, Medicare Part D phases will see significant changes meant to simplify and improve the program. These changes will involve the elimination of the confusing “donut hole” coverage gap and a new out-of-pocket expense limit of $2,000 per year for covered drugs. However, this limit does not apply to Part B drugs provided by a medical professional in an outpatient hospital setting.
Additionally, premium costs for Medicare Advantage plans that include prescription drug programs are set to fluctuate, with average premiums decreasing slightly in 2025, but other costs such as plan deductibles doubling from 2024 values. The number of Medicare Advantage plans including prescription drug programs available will also slightly decrease. While feared cuts to formularies-lists of covered prescription medications-have not occurred, insurers may still implement changes that make drug coverage more difficult to acquire.
For Part D drug plans not included in Medicare Advantage, costs will also vary. Nationally, average projected monthly premiums for standalone Part D plans will decrease slightly, but these changes differ drastically by state and plan. Despite fewer standalone Part D plans being available in 2025, a new optional payment plan will be introduced to make budgeting for medication costs easier.
Alongside these changes, costs related to Original Medicare will increase across all components in 2025. Enrollees of Medicare Advantage will begin receiving notifications regarding unused supplemental benefits in mid-2025. Lastly, measures will be taken to increase enrollees' immediate access to more affordable medications and broaden the range of mental health providers available as Medicare providers, with the aim of improving care services and reducing unmet mental health needs.