Medicare Part D
Medicare Part D updates to help seniors with prescription drug costs
Big changes have been made to the Medicare Part D program for 2025. These updates are aimed at lowering prescription drug costs for seniors living in the United States and making it easier to manage those costs throughout the year.
The following is an overview of the changes that took effect on January 1, 2025. If you have questions, you can call Madrigal Patient Support. We have also provided helpful resources below.
What’s new for Medicare Part D in 2025
$2,000 annual cap on out-of-pocket costs
Starting in January 2025, out-of-pocket prescription drug costs were capped at $2,000 per year (down from $3,250 in 2024) and the “donut hole” coverage gap was eliminated. Once the $2,000 limit is met, Medicare will cover the remaining prescription costs for the year.
Spreading out-of-pocket costs throughout the year
If the $2,000 cap is a financial burden, the Medicare Prescription Payment Plan (MPPP) may be able to help. This program allows eligible participants to spread their prescription costs into smaller monthly payments. Each month, they’ll receive a statement from their Part D plan showing their costs under the MPPP, which will be evenly divided over the rest of the year.
Eligible individuals can join the MPPP at any time, including during open enrollment. To sign up, individuals can call the number on their Part D plan ID card, visit the plan website, or mail in a form.
Expanded eligibility for the Extra Help program
The Extra Help program, also known as the Low-Income Subsidy (LIS), has expanded its full benefits to help people with limited income get Part D prescription drug coverage.
In 2024, limited income was set to 150% of the Federal Poverty Level. Each year, the income limits are updated when the Federal Poverty Level changes.
For example, in 2024, participants may have qualified for this subsidy if they earned up to $22,590 annually (for a single person) or $30,660 (for a couple) and met certain other requirements. Additionally, their assets needed to be below $17,220 (for a single person) or $34,360 (for a couple) to qualify.
Helpful resources to learn more about the 2025 Part D changes
- For more information about the Extra Help program, including how to enroll, visit Medicare.gov
- Learn more about the Medicare Prescription Payment Plan (MPPP) at Medicare.gov
- Check out how out-of-pocket drug costs will be reduced at CMS.gov
- Get free, unbiased information on Part D benefits through the Local State Health Insurance Assistance Program (SHIP) at SHIPHelp.org
REFERENCES
Costs in the coverage gap. Medicare.gov. (2024).
What’s the Medicare Prescription Payment Plan? Medicare.gov. (2024).
Medicare Prescription Payment Plan: Final Part One Guidance on Select Topics, Implementation of Section 1860D-2 of the Social Security Act for 2025, and Response to Relevant Comments (2024). Department of Health & Human Services, Centers for Medicare & Medicaid Services.
Inflation Reduction Act and Medicare. CMS.gov. (2024).
Understanding the Extra Help with Your Medicare Prescription Drug Plan. SSA.gov. (2024).
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