Medicare is making huge changes to things for 2025. More is being required of carriers financially and this will make changes to Prescription Drug and Medicare Advantage Plans.

Prescription Drug Plan Changes

• Beneficiary Out of Pocket spending is capped at $2,000 for 2025.

• As in 2024, there is no beneficiary cost sharing above the annual OOP threshold in 2025.

• The coverage gap phase (also known as the “donut hole”) will be eliminated, which will result in standard Part D coverage consisting of a three-phase benefit: a deductible phase, an initial coverage phase, and a catastrophic phase. There will be no initial coverage limit, and the initial coverage phase will extend to the maximum annual Out of Pocket threshold, at which point the catastrophic phase will begin.

• The Coverage Gap Discount ends effective January 1, 2025, and is replaced by the Manufacturer Discount Program. Under the Manufacturer Discount Program, the manufacturer will typically pay a 10% discount for brand-name drugs in the initial coverage phase. In the catastrophic phase, the manufacturer will typically pay a 20% discount for brand-name drugs.

Medicare Advantage Changes

Plan changes for 2025 will be announced October 1, 2024. Because of the requirements of the Inflation Reduction Act, there are guesses that benefits will be decreased, and costs will increase. It will be clear soon exactly what will happen. If you currently have a Medicare Advantage Plan, you should soon receive an Annual Notice of Change letter, outlining the changes to your current policy. Contact an agent to compare these changes and determine what might be the best option for you.

Medicare Advantage plans will be required to send policyholders a personalized “Mid-Year Enrollee Notification of Unused Supplemental Benefits” in July. It will list all supplemental benefits the person hasn’t used, the scope and out-of-pocket cost for claiming each one, instructions on how to access the benefits and a customer service number to call for more information.

Changes are coming. Contact an agent or broker for more information about how these changes may affect you.

Adapted from articles at CMS.gov and AARP.com.

This article is for information only and should not be considered a recommendation. Talk with a licensed Health Insurance Professional about your specific circumstances. For more information you can go to The Texas Department of Insurance.