Next Steps If Your 2025 Medicare Prescription Costs Increased
Key Takeaways
- Medicare Advantage and Part D plans can adjust coverage and costs for medications each year, making it important to review your plan annually to avoid unexpected expenses.
- Prescription costs may rise if medications are moved to higher tiers in the formulary or if coverage is dropped entirely, despite new federal cost caps.
- The Medicare Advantage Open Enrollment Period (Jan. 1 through Mar. 31) and Annual Enrollment Period (Oct. 15–Dec. 7) allow you to change plans to better match your prescription needs and budget.
Did you know your Medicare plan might not cover your prescriptions at the same prices next year? Every year, Medicare Advantage and Part D plans can change what medications are covered or the cost. These changes are one reason why checking your plan each year is important. You don’t want to be hit with a surprise bill when you go to the pharmacy in January.
Federal Changes to Medicare Prescription Costs in 2025
The Centers for Medicare & Medicaid Services (CMS) is implementing two major changes to prescription drug coverage in 2025. First, it’s capping Part D out-of-pocket costs at $2,000.
This cap completely eliminates the previous “donut hole,” an expensive situation where limits on plan coverage meant people had to pay for their prescriptions without the plan contributing until they reached catastrophic coverage levels. Starting in 2025, once you’ve paid $2,000 for your prescriptions, you won’t have a copay or coinsurance for covered drugs for the rest of the year.
The second major change is a new prescription payment plan. In all Part D plans – including Medicare Advantage Prescription Drug Plans (MAPD) – you can opt for a monthly payment plan rather than paying at the pharmacy each time you pick up a prescription.
Your Part D or Medicare Advantage plan will pay the pharmacy directly with this setup. In return, you make a monthly payment to your plan equal to the medication’s cost. This doesn’t reduce how much you pay but instead makes it predictably spaced out. If you prefer to continue paying at the pharmacy, you can keep doing that.
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Why Did My Medicine Get More Expensive?
Despite the new policies to control prescription drug costs, some people on Medicare may experience increases. One reason is that more plans will charge an annual deductible, the amount you have to spend out of pocket before your insurance kicks in. The health policy nonprofit KFF reports that 84% of people on standalone Part D plans and 60% of people on MAPD plans will have a deductible if they don’t change plans.
Most Medicare plans with Part D coverage operate from a formulary, a list of covered prescription drugs organized into tiers. Each tier is a category of prescriptions that are usually similar in cost. You pay a designated copay (a set amount) or coinsurance (a percentage of the drug’s cost) for prescriptions in each tier. For example, the cheapest tier is usually generic medication, while the next level may be low-cost brand names, followed by high-cost brand names, and then unique or extremely expensive prescriptions.
Your plan might make changes to the formulary or the coverage provided on different tiers. According to KFF, a growing number of Medicare Advantage and Part D plans will charge coinsurance rather than copays for certain drugs in 2025. That could make your out-of-pocket costs higher and harder to predict.
Sometimes, a plan may stop covering a drug entirely. Costs may also change depending on the other medications available and the plan’s contracts with various manufacturers and pharmacies. Even with the new out-of-pocket cap and payment plan, losing coverage on a prescription or seeing it jump to a new tier can be a shock to the wallet.
Medicare Advantage Open Enrollment: A Chance to Change Plans
You have an opportunity to change your plan if the prescription costs for next year don’t work for you.
The Medicare Advantage Open Enrollment Period (MAOEP) happens every year from January 1 through March 31. This enrollment period allows those with an existing Medicare Advantage plan to to another Medicare Advantage plan. Those with an existing Medicare Advantage plan can also drop their plan and go back to Original Medicare and enroll in a separate Part D prescription drug plan.
During the MAOEP, you can compare the plans available in your area to see whether they cover your prescriptions and the cost for 2025. You’ll also want to ensure your preferred pharmacy is covered because plans may be partnered with certain pharmacies.
If you’re looking at a Medicare Advantage plan with prescription drug coverage, you’ll want to review the whole plan cost and the provider network to ensure that’s a good fit for you as well. If you have a separate Part D plan, it may be worth checking to see if a bundled Medicare Advantage plan would be more cost efficient.
If you find a plan that’s right for you, you can enroll individually or work with a licensed insurance agent. Individual enrollment provides flexibility and a do-it-yourself approach, while working with an insurance agent is a guided process with someone who can help you prioritize your concerns and find relevant Medicare plans. With either approach, creating a list of your prescriptions and your preferred pharmacy location may be helpful. You will need both to find the specific costs for your needs.
Putting It All Together
Federal changes like eliminating the donut hole and creating a payment plan may reduce your prescription costs in 2025, but changes to your Medicare plan’s formulary could still be expensive. Compare Part D coverage during the Medicare Advantage Open Enrollment Period to find the best price available for you. A licensed insurance agent may be able to help you find a Part D plan with coverage for your prescriptions and pharmacy.
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