Starting in January, the Inflation Reduction Act’s most significant set of changes is set to roll out for Medicare beneficiaries. The law, enacted in 2022, established several changes that could make medications more affordable for some Medicare beneficiaries.
Under the changes for 2025, Medicare Part D beneficiaries will pay no more than $2,000 out-of-pocket annually.
The $2,000 cap automatically applies to every Part D plan, including Medicare Advantage programs that include prescription drug plans. However, the cap applies only to medications covered by Medicare prescription drug plans. Some Part D plans don’t cover certain medications, so check your insurance plan’s formulary for 2025.
The out-of-pocket cap also doesn’t apply to drugs covered under Medicare Part B.
Another new benefit of the law is a new payment option called the Medicare Prescription Payment Plan. The payment plan allows beneficiaries to spread out-of-pocket costs throughout the calendar year, up to the $2,000 maximum. All Medicare prescription drug plans, including Medicare Advantage with prescription programs, must give patients the option to pay for out-of-pocket prescription costs in monthly installments.
There’s no cost to participate in the Medicare Prescription Payment Plan, and no interest or fees on the amount owed, even if a payment is late.
If you opt into the Medicare Prescription Payment Plan, sign up during the Medicare open enrollment period (Oct. 15-Dec. 7). After you enroll, you no longer will pay anything at your pharmacy for covered Part D drugs. Instead, your plan will send you a monthly bill for any cost sharing you owe.
If you sign up this year, that benefit will begin Jan. 1, 2025. You can still sign up for the payment plan program later in 2025. For example, if you filled a prescription in January but didn’t sign up for the program until February, you would pay the full cost of your January prescription up front at your pharmacy. After enrolling in February, your subsequent monthly prescription copayments, up to the annual $2,000 out-of-pocket cap, would be divided across 11 monthly payments to your prescription plan.
To enroll, Medicare beneficiaries must call their Part D plans or look for the program election request form on their Part D insurer’s website. Part D insurers must send the form to enroll in its membership ID card mailing or a separate mailing sent during the same timeframe.
Call 800-MEDICARE (800-633-4227) with questions, or contact PHA’s Treatment Access program at 240-485-0758.
Learn more details about 2025 Medicare changes in the Oct. 9 episode of PH Insights, PHA’s new podcast.
