Medicare coverage for prescription drugs changing in 2025

Prescription coverage for Medicare policyholders is changing in 2025. 

If you have a Medicare plan with Part D, starting Jan. 1, the yearly out-of-pocket drug costs will be capped at $2,000. After that is met, insurance will cover 100% of the prescription costs. 

Before, Medicare offered a confusing formula referred to as “the donut hole”.

“The idea was you're eating your way through the donut you get to a certain point your coverage went away and then when you got to the other side of the donut you had really good coverage again,” John Woods, an agent with Insurance Navigators said. 

This new plan simplifies things to a set number of $2,000 first - then nothing.

But to balance out the new coverage the cost of your prescription at the counter might go up.

“Eliquis, is a great example. On one of the more popular Medicare Advantage plans this year, 47 dollars and next year it's 142 dollars,” Woods said. “That difference in cash flow can make a big difference to somebody on a limited income.”

On top of that some prescriptions could be taken off of the coverage list so agents are encouraging anyone on Medicare to double check their plans.

“I would say on a whole there's no reason to panic or anything,” Joe Mersol, of Mersol Financial Solutions said. “...It’s not bad, all of these things are improvements.”

Some agents see the change as a good thing that will save people money in the long run.

“For people with those high cost drugs … you could hit your catastrophic by January, February and pay nothing the rest of your year for your drugs,” Mersol said. 

The Medicare Open Enrollment period ends on Dec. 7. Agents say everyone with the insurance should meet with a professional to make sure all of their needs are covered by a plan before that deadline.

If changes have to be made in the new year, policyholders have the opportunity to make one change from January to March.