By McKay Moravick
With Medicare Open Enrollment just around the corner, many beneficiaries may be worried about the possibility of rising drug plan premiums. However, the government is stepping in with a plan to prevent a significant increase in costs for enrollees.
$2,000 Annual Cap on Prescription Costs
Beginning in January 2025, a $2,000 annual limit on out-of-pocket prescription drug costs will take effect, part of the Inflation Reduction Act. While this cap is a relief for Medicare beneficiaries, it has also led insurers to propose higher premiums due to the increased financial responsibility they will face. Under the new rules, insurance companies will be responsible for covering 60% of drug costs once enrollees hit the catastrophic coverage phase, compared to just 15% in the past.
Government Plan to Stabilize Premiums
To prevent premiums from rising sharply, the government has introduced a subsidy program that will provide insurers with about $5 billion in 2025. This support is intended to cap premium increases for Medicare Part D plans, which cover prescription drugs, limiting them to no more than $35 per month for enrollees.
Keeping Prescription Coverage Affordable
These measures aim to ensure that Medicare beneficiaries can continue to save on their prescription costs while maintaining access to affordable, stable plan options. This subsidy program is part of a broader effort that will run for up to three years, designed to help both beneficiaries and insurers adjust to these new changes.
What to Expect During Open Enrollment
As Medicare Open Enrollment kicks off on October 15th, it’s important to review your plan options and understand how these upcoming changes could affect your coverage. If you have any questions about your Medicare drug plan or the new 2025 updates, we’re here to help. Contact us to ensure you have the best plan to meet your needs.
