Two major changes are taking effect in 2025 in Medicare Part D that will help seniors manage their prescription drug expenses.
Following action from Congress, Medicare Part D plans now must cap enrollees’ out-of-pocket spending on covered prescription drugs at $2,000 a year. Part D beneficiaries also have the opportunity to spread or smooth their drug costs over a calendar year.
These new benefits have a lot of implications, which were discussed by a panel of experts assembled by WTOP and Federal News Network and sponsored by Astellas Pharma.
Julia Schreiber, program director for the Maryland State Health Insurance Assistance Program, said the changes point out the need for people to keep up with updates to Medicare plans.
“It’s important to review the plan every year because plans can change,” Schreiber said, noting that goes beyond reviewing updates during the annual period of open enrollment that ended Dec. 7.
She suggested that, as the year moves forward, people think not only about their medications but also where they are going to get their medications.
Adina Lasser, public policy manager with the Alliance for Aging Research, said advocacy groups are trying to make sure people know about critical changes that can affect their health care.
Her organization has put together a short video that discusses the changes.
Lasser said patient advocacy groups are working with the government to try to make sure people get the information they need. She pointed out that it’s not only older adults who need to keep pace with the details about out-of-pocket prescription costs but those who take care of parents and grandparents too.
“It’s a complex system,” Lasser said. “Wherever we can find inroads to make that easier, I think, it’s important.”
Medicare drug cost cap will impact millions
In 2021, at least 4 million people paid over $2,000 each for prescription drugs, Lasser said. The average was close to $3,300.
Jennifer Dexter, vice president of policy with the National Health Council, said the cap is “really pretty life changing.”
She and others expect it is going to make a big difference in peoples’ lives.
“What’s really nice about that is you don’t have to enroll,” Lasser said. “You honestly never really have to think about it. It’s just when you hit that $2,000 threshold, your expenses will end for the year.”
“We always say at the National Alliance for Caregiving that caregiving hits you at moments when you least expect it,” said Toni Gingerelli, policy and advocacy director for NAC. “So it’s really important that people are aware of the changes that are happening.”
Another major change? The Medicare Prescription Payment Plan lets people spread out their costs, an option commonly referred to as “smoothing.”
“What it does is it allows you to spread out your costs evenly every month over the course of the year,” Lasser explained. “You can enroll any time throughout the year. But if you enroll in July, you can only spread your costs over six months versus January — 12 months.”
For that reason, Lasser and others recommended enrolling in the Medicare Prescription Payment Plan early in the year. To enroll, beneficiaries must contact their Medicare Part D plan because it is not possible to sign up at the pharmacy counter. Experts suggest people enroll at least 24 hours before picking up their first prescription from the pharmacy.
Consider your “smoothing” options
Dexter said it’s important for people to review their financial situation when considering whether to use the smoothing plan.
Schreiber said people can take advantage of online tools to determine what their medication costs will likely be for the year and “anticipate what those costs might be month to month — and see if it will benefit you.”
Along those lines, Dexter said the National Health Council has resources on its website to help people navigate the changes.
Gingerelli added that financial planning is one of the first things that caregivers take on with a loved one. “So having more resources for caregivers, like the smoothing process — to be able to plan budgets more effectively and avoid upfront financial shocks — is really crucial,” she said.
Resources from advocacy groups can be helpful too as people try to become familiar with the various changes.
“We want to make sure that people have the opportunity to opt in” to the Medicare Prescription Payment Plan, Gingerelli said. She also noted that the plan also is “a great step forward to making sure that caregivers improve [people’s] medication adherence.”
Healthcare advocates for years have pointed out that many people don’t take their medication — or don’t take it as prescribed — because they feel they can’t afford the expense.
Dexter reiterated that it is important to get the word out about payment options because there will be people who have trouble affording the $2,000 before the cap kicks in.
Although the annual enrollment period ended in early December, people still have some options.
Between Jan. 1 and March 31, individuals enrolled in a Medicare Advantage plan can make a one-time election to opt into another Medicare Advantage plan with or without prescription drug coverage, Schreiber said.
But they will have to wait to make changes to the Part D plan.
All of the panelists said they are optimistic about the latest changes and believe they will make major differences in American’s health care.
“These are things that we have fought for years and years to make happen, so to see them really happening and to be in this moment is significant,” Dexter said.
More information about the Medicare Prescription Payment Plan can be found on the Centers for Medicare and Medicaid Services’ website.
And there are resources available on the Alliance for Aging Research website and NHC’s website too.
