What’s Changing with Medicare Part D in 2024 and 2025

Each year, Medicare changes to keep pace with our ever-evolving world. However, changes to Medicare can mean changes to your coverage, so it’s important to stay informed about the latest updates.

To help, we’re here to walk you through the recent Medicare Part D (prescription drug coverage) changes that happened under the Inflation Reduction Act. This act will make prescription drugs more affordable in 2024 and 2025. Here’s a quick rundown on what to expect.

What’s Changing to Part D in 2024

• No more 5% coinsurance during the Catastrophic Phase 
  The Catastrophic Phase in Medicare Part D occurs after you’ve reached the $8,000 annual limit in certain out-of-pocket spending on prescription drugs. In the past, you would pay a 5% coinsurance for covered prescription drugs during the Catastrophic Phase. However, the 5% coinsurance has been eliminated in 2024. Your plan will now pay 20% of the costs instead of 15%. This update will help those affected save thousands of dollars in out-of-pocket expenses.
• Expanded eligibility for full low-income subsidy benefits
  People with Medicare who earn up to 150% of the poverty level and have limited resources can now get full help with their drug costs through the Part D Low-Income Subsidy (LIS) Program.
• Limiting how much the base Part D premium can increase each year
  Each month, you pay a certain base cost for your Medicare Part D premium. Starting in 2024, this base cost will not increase by more than 6% each year. However, the cost of individual Part D plan premiums and annual plan-level premiums will continue to change.

What’s Changing to Part D in 2025

• A new $2,000 cap on out-of-pocket drug spending
  In 2025, there will be a new $2,000 limit on how much a person pays out of pocket for prescription drugs each year.
• No more Coverage Gap Phase
  If you ever experienced the Part D Coverage Gap Phase (also known as the “donut hole”), you may have had to pay full medication costs before your plan moved into the Catastrophic Phase. The good news is that the Coverage Gap Phase will be going away in 2025, which will limit unexpected costs.
• Medicare will pay a smaller share of costs 
  Medicare’s share of costs will drop from 80% to 20% for brand-name drugs and from 80% to 40% for generics. This means that Part D plans will cover a larger share of costs above the coverage cap—so you may end up paying less. Plus, to help further reduce costs, drug manufacturers will also provide a 20% discount on brand-name drugs.
• New discounts for the Initial Coverage Phase
  The Initial Coverage Phase is when your health plan helps pay for your covered prescription drugs once you meet your deductible. In 2025, drug companies will give a 10% discount on brand-name drugs in the Initial Coverage Phase. Your Part D plan will also pay 65% of the costs for brand-name drugs, which means more cost savings for you.
• Spreading out costs 
  Starting in 2025, you can spread your drug cost payments out over the year instead of paying one large sum in a month.

Things often change in Medicare, but Cigna Healthcare’s^SM commitment to you remains the same. Our licensed Benefits Advisors are here to help you navigate Medicare changes so you can explore your options and plan ahead. Call 1 (866) 627-3098 (TTY 711) 7 days a week, 8 a.m. to 8 p.m., Local Time for more information.