Major Benefit Coming for Medicare Part D

Beginning in January 2025, Medicare Part D prescription drug plans must cap out-of-pocket spending for drugs at $2,000 per person per year. However, do not think that’s an all-in cost for the year.

There are four areas of costs in Part D plans and Medicare Advantage plans with drug coverage and you may see increases in your own out-of-pocket costs:

Monthly premiums are paid for Medicare Part D plans and some Medicare Advantage plans in addition to the costs for drugs. Premiums are not part of the $2,000 cap.

Deductibles are determined by each insurance plan. Most Part D plans require a deductible. You will usually pay the retail cost for your prescriptions up to the deductible. The maximum deductible is $545. In 2024.

After the deductible is met, you are in the initial coverage phase. This is where insurance kicks in to help pay for your prescriptions.

The catastrophic phase applies if you have high expenses for prescription drugs. Beginning in 2025, your costs will be capped at $2,000. That includes the amount you’ve paid in the deductible and initial phases.