Open Enrollment Changes

The Medicare Open Enrollment is once again upon us. As it pertains to prescription drug coverage this means good news for some, with “not so good news” for others.

In 2024, the maximum out-of-pocket expense for an individual was $8,000. This meant that a person could be responsible for up to $8,000 towards the cost of their medicines during the course of the year. The Prescription Drug Plan would pick up the cost of the rest of the medicines at 100%.

For 2025, the Inflation Reduction Act, which was passed by Congress, mandated that the Part D maximum for which a person could be responsible has been reduced to $2,000, after which the insurance company would then pick up the balance.

Unfortunately, to offset their potential increase in financial responsibility, the insurance companies have not taken this quietly. Many of you will see large increases in your premiums or higher co-pays toward the cost of your medicines than you experienced in 2024. For those with significant drug costs the difference between the $8,000 and the $2,000 maximum out-of-pocket could result in a significant savings in 2025. By the same token, individuals who take very few medications (if any) will probably not be happy with the increase in premiums. You can see why Medicare beneficiaries would have differing opinions regarding this change.

One other piece of information is that the dreaded “donut hole” will no longer be in existence. Once you’ve reached the $2,000 level, everything will be covered at 100%. It is that simple. My recommendation is that you shop around until you find the plan most suitable for your needs.