What to Know about Part D Medicare changes for 2025

Here are some important updates regarding Medicare Part D prescription drug coverage that took effect on January 1, 2025. These changes are designed to make prescription medications more affordable and coverage easier to understand.

• “Donut hole” eliminated - The coverage gap, commonly known as the "donut hole," has been eliminated. Previously, beneficiaries were responsible for a larger portion of their medication costs after reaching a certain spending threshold. With this change, you’ll no longer experience a coverage gap.

• New out-of-pocket cap - A new $2,000 annual out-of-pocket cap has been introduced. Once out-of-pocket spending for drugs your plan covers reaches this limit, your plan will cover 100% of your medication costs for the rest of the year. This cap includes deductibles, copayments, and coinsurance, among other covered costs, but does not apply to monthly premiums.

• Payment plan offering required - The new Medicare Prescription Payment Plan requires that enrollees be given the option to pay out-of-pocket prescription costs using a payment plan rather than all at once when they’re at the pharmacy. 

  
  

  

  
  
  
  

• Other key points to remember:

  • Deductibles -  In 2025, the deductible for Medicare Part D plans will be at most $590. Keep in mind that some plans may not have a deductible. 

  • Copayment & Deductibles - If your plan has a deductible and you have reached that deductible, you’ll pay at most a copayment or coinsurance for covered drugs until you hit the $2,000 cap. And you may not have a cost of share (i.e., an out-of-pocket payment like a copayment or coinsurance), depending on the tier that your drug plan assigned your medication.

  • Importance of the Fine Print - In order to determine your expected out-of-pocket costs for the year, it’s important to understand what tier your prescribed medications will fit in and your plan’s cost of share for the tier(s).