The Inflation Reduction Act became law in August of 2022. One of the major components to be addressed was the high cost of prescription drugs, which, in the United States, is continually among the highest in the world. Millions of Medicare Beneficiaries have been greatly impacted by the high costs of their prescriptions, causing some to have to choose between other life necessities or their medication. In an effort to remedy this, there are some major changes for 2025 Medicare Prescription Drug Plans.
NEW DRUG PAYMENT STAGES:
Annual Deductible - up to max of $590.
Initial Coverage - Beneficiary pays 25% until Max $2,000 out-of-pocket costs (includes deductible, copayments and any coinsurance). (Greatly reduced from 2024)
Catastrophic Coverage - $0 cost-sharing. No more Donut Hole! Yay!
INSULIN PRICE CAP: A monthly cap of $35 on out-of-pocket costs for insulin for Medicare Beneficiaries, whether via Infusion Pump or through syringes.
FREE VACCINES: All adult vaccines covered under Medicare Part D, including the shingles vaccine, Hep A & B, RSV, Tdap and Td, will be available at no cost. Part B already covers Covid-19, flu and other vaccines at no cost share.
NEW MONTHLY PAYMENT OPTION: Beneficiaries may now opt to spread out their drug costs over the course of the year. Instead of paying large sums (deductible or copays) at the pharmacy, you can opt to make smaller, manageable monthly payments, through your insurance plan.
EXPANSION OF LOW INCOME SUBSIDY (LIS): The IRA expands eligibility for the Extra Help program, a Federal Program which assists low-income Medicare Beneficiaries with premiums and out-of-pocket drug costs. Beneficiaries that previously only received partial benefits will now receive full benefits.
INCREASED ACCOUNTABILITY FOR DRUG COMPANIES: Drug manufacturers that increase the prices of Part D drugs faster than inflation will be required to pay rebates to Medicare, discouraging unjustified price hikes.
MEDICARE DRUG PRICE NEGOTIATION PROGRAM: The IRA authorizes Medicare to negotiate prices for up to 10 high-cost drugs, with the first negotiated prices expected to take effect in 2026. Drug companies must ensure these prices are available to eligible Medicare Beneficiaries, as well as to pharmacies, mail-order services, and other entities that dispense these drugs. Medicare prescription drug plans, including stand-alone Part D Plans and Medicare Advantage Prescription Drug Plans, are legally required to include these selected drugs in their formularies. The following drugs have been entered into negotiations with Medicare and the new pricing will go into effect January 1st 2026: Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, plus a group of drugs for diabetes including Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill.
THE BOTTOM LINE - Some consumers on Medicare will save money, especially those with more expensive medications. However, Medicare Part D Plans will now have a much larger burden of payment once a consumer reaches their $2,000 max out-of-pocket threshold. This has caused the Part D Plans to do three things:
1. The premiums of many 2025 Part D Prescription Plans will be increasing.
2. The Maximum Part D Deductible will be increased to $590.
3. Some Plans will be increasing the copays for certain medications.
The best thing for Medicare Beneficiaries to do is to read your (ANOC) Annual Notice Of Change. This is a letter from your current insurance carrier that explains all the upcoming changes and exactly how they will affect you. You may want to seek out a broker to help you understand what other options you have.
Comments