Part D Out of Pocket Limit Reduced to $2000 in 2025: Part D Premiums Could Rise

August 28, 2024 — People enrolled in Medicare Part D and Medicare Advantage are getting some really good news, and some not so bad news. The biggest changes will go into effect in 2025. They were made possible by the Inflation Reduction Act of 2023, which passed without any Republican votes.

Here is the good news for Medicare recipients:

The changes coming are going to save many recipients a lot of money starting in 2025.

The government has negotiated Medicare prices on 10 commonly used expensive drugs, like the blood thinners Xarelto and Eliquis and some diabetes drugs.

Maximum out of pocket spending is limited to $2000 starting in 2025.

Insulin costs cannot exceed $35/month.

Vaccines under Part D are now free (some shingles vaccines were upwards of $70).

Drug companies cannot increase prices to Medicare more than the cost of inflation.

But there is some bad news:

Although insurance companies will benefit from lower prices on some drugs, premiums will have to go up eventually. With the lower out of pocket costs that began this year (and will be lowered to $2000 in 2025), the insurance companies are going to have to pick up the slack with higher Part D (prescription drug) premiums. How it affects people in Medicare Advantage plans, which have very low or zero premiums and often include drug coverage, is yet to be seen.

The average Part D premium is currently $43.

Comments: How much have you been spending out of pocket for prescription drugs? Will these changes make a difference to you.

For further reading:
Part D Premiums Getting Pushed Up

New Medicare Changes Bringing Surprising Savings