You may have heard, 2025 will bring major changes to Medicare prescription drug costs. The Inflation Reduction Act will enact two more Part D prescription drug reforms on January 1st. 2025. These changes are intended to reduce costs for many beneficiaries and may have an effect on overall benefits.

These major changes include:

1. Annual prescription drug costs will be capped at $2,000
2. Option to smooth out prescriptions costs into set monthly installments.

How will this affect Part D and Medicare Advantage Plans? All plans must include the above changes! Your prescription drugs will automatically be capped at $2,000 for any plan with Part D coverage. If you have expensive prescriptions that will make your copays much higher at the beginning of the year, then you can request installments to smooth out your copays into monthly payments. This can help with more predictable monthly costs. This is great news for many beneficiaries! It also means it will be more important than ever to review your plan coverage for 2025!

These reforms could mean changes to plan formularies, premiums, and/or deductibles across carriers. Beneficiaries need to verify any changes to their plan for 2025 and use the Annual Election Period to compare plans in the area. If you receive your drug coverage through a Medicare Advantage plan, also be sure to check if your plan is making any changes to its extra benefits. Your plan will send out an Annual Notice of Change (ANOC) before September 30th highlighting any changes. Many beneficiaries may make a plan change for 2025 as a result of the new reforms.