Here are 3 major Medicare updates coming in 2025 — plus what you need to know before locking up your coverage this year

Medicare Open Enrollment is happening now. From October 15 to December 7, retirees have the option to make changes to their Medicare plan to make sure their health care needs are met.

Usually, pensioners – just like everyone else – get it only one chance per year to make changes to their Medicare coverage, so it’s critical that older adults are informed consumers during this time—especially when changes occur.

Don’t miss out

For next year, most of the big changes revolve around Medicare Part D, which deals with prescription drug coverage. If you’re currently enrolled in Medicare Part D, you should pay attention to these new rules—and you should also consider them if you have a Medicare Advantage Plan, since these plans may also offer prescription drug coverage. recipe.

Here’s what you need to know.

There is a new limit for Part D coverage

The first and most important thing to be aware of is that there is a new cap on out-of-pocket costs for prescription drug coverage under Medicare Part D. This cap was introduced as part of the Inflation Relief Act .

Part D will now offer three levels of coverage, eliminating the complex payment structure that existed before the change. Here’s how it will work.

• You’ll have a deductible, which is capped at $590 per year, that you must pay out of pocket before Part D starts covering your prescriptions.

• During the initial coverage phase, you’ll pay 25% of the total drug costs.

• Once you reach a spending limit of $2,000 paying for covered drugs, you won’t have to pay anymore.

There are some plans that offer better coverage, including offering lower deductibles, but all Part D plans now must be at least this generous.

Read more: These 5 Magical Money Moves Will Move You Up America’s Net Worth Scale in 2024 – and you can complete each step in minutes.

Medicare Part D premium prices could increase

With the new out-of-pocket cap on drug spending, lawmakers were concerned that insurers could raise premiums for stand-alone drug plans. To prevent this in 2025, the Biden administration instituted a program to subsidize these plans.

Unfortunately, insurers are still allowed to raise rates in 2025, though the increase is capped at $35 per month. However, this can be a substantial amount of money in added premiums.

If you currently have an independent plan, find out if your premiums are going up. If they are, consider shopping around to see if there are better deals.

A Medicare Prescription Payment Plan option is available

Finally, the introduction of a Medicare Prescription Payment Plan is another huge change that could have a positive impact on seniors who struggle to budget for high-cost medications.

This option makes it possible for older adults to spread their expected costs throughout the year. Instead of paying in one lump sum, they can pay the price of the drugs over time. If you’re on a fixed income, this can be more affordable than having to pay thousands all at once when getting expensive prescriptions.

It’s important for older Americans to be aware of these changes as they enter the open enrollment period so they can carefully explore their prescription drug coverage options to make the best choice.

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This article provides information only and should not be construed as advice. Offered without warranty of any kind.