If you’re 65 or older, make sure Medicare Open Enrollment is on your calendar. It is an important time of year to review your current medical coverage and healthcare needs — and select the most appropriate Medicare plan for the new year.
Even if you’re already enrolled in Medicare, it’s still a good idea to review your plan, considering that coverage and your health needs may change from year to year. If you will become eligible for Medicare coverage for the first time in 2025, now is a good time to start learning about the different types of Medicare (i.e., Medicare Parts A, B, C, and D) and what they mean for you.
The open enrollment period for Medicare 2025 begins October 15, 2024, and ends on December 7, 2024. Here’s what you need to know about Medicare to ensure you’re prepared, especially for Medicare Part D Open Enrollment.
Back to topWhat are the different types of Medicare?
Medicare is an insurance plan provided by the federal government and overseen by the Centers for Medicare and Medicaid Services (CMS). Medicare coverage is divided into four general sections, each of which covers different services. You must be enrolled in Parts A and B to be eligible for Part D.
Medicare Part A covers hospital expenses (i.e., pays for costs if you are hospitalized or placed in a nursing home). Medicare Part B covers outpatient services, such as doctor’s visits, labs, immunizations, X-rays, and surgeries that don’t require you to stay overnight in a hospital.
Medicare Part C, also known as Medicare Advantage, is a type of Medicare coverage offered by private insurance companies that contract with CMS. It is available to anyone enrolled in Medicare Parts A and B. Medicare Advantage plans cover not only the services provided by Parts A and B, but may also offer dental, vision, and/or prescription drug coverage.
Medicare Part D is a supplemental form of Medicare that specifically covers prescription drug services. If you are enrolled in Parts A and B, you can enroll in a Part D plan for prescription coverage.
Back to topWhy would you want to get Medicare Part D?
Medicare Part A covers only medications that you receive while you are in a hospital or a skilled nursing facility. Medicare Part B covers only a limited number of medications and typically only if they are administered in an outpatient setting (such as a doctor’s office or clinic). Examples include vaccines, injectable medications, and medications administered via IV.
This lack of regular prescription coverage can be a significant problem for older adults. According to a 2018 report published by the CDC, more than 87% of adults aged 65+ take at least one prescription drug per month, and almost 40% take five or more prescription drugs monthly. If you’re 65 or older, it’s worth looking into how signing up for Medicare Part D coverage may save you money, especially if you are already taking multiple prescriptions.
Back to topWho qualifies for Medicare Part D?
Anyone who is eligible for Medicare coverage is also eligible for Medicare Part D. Generally, you will qualify for Medicare if you are 65 or older. People who are about to turn 65 can apply for Medicare outside of the regular open enrollment period during their 65th birthday month, as well as the three months before or after (although coverage does not start until you turn 65).
If you are under 65, you may also qualify under special circumstances: for example, if you’re disabled (and have been receiving disability checks from the Social Security Disability Insurance for at least 24 months), have end-stage renal disease, or have ALS (i.e., Lou Gehrig’s disease).
Back to topHow can you sign up for Medicare Part D?
Once you are enrolled in Medicare Parts A and B, you can sign up for Medicare Part D coverage on the Medicare Plan Finder page. You can review and select health plans after entering your ZIP code and answering a series of questions. If you are already enrolled in a Medicare Part D plan, your plan will automatically renew, so technically, you’ll only need to visit the website if you want to change plans.
However, it’s still a good idea to review your plan every year in case your current plan has changed or to see whether a different plan would better fit your current needs.
Back to topHow much does it cost?
The Medicare Plan Finder page will give you pricing information. You will be prompted to type in your list of medications and select your preferred pharmacy. The website will then provide a list of plans from which you can choose. The cost of your Medicare Part D plan may vary based on the plan you select and where you live. You’ll want to compare plan costs and co-pays to determine which plan will work best for you.
Back to top2025 Medicare Part D Highlights
Here is some important information about Medicare Part D for 2025.
Cost Improvements Due to the Inflation Reduction Act
The 2022 Inflation Reduction Act includes many updates to Medicare Part D. Improvements began in 2023 and will continue to be rolled out until 2029. Here are some important highlights for 2025 that may help keep your prescription drug costs down.
The Coverage Gap (aka the Donut Hole) has been eliminated as of 2025.
Instead, you’ll simply have a deductible, then a co-pay on prescriptions until you meet a total out-of-pocket limit. Then you will have no further costs for formulary drugs for the year.
Your total out-of-pocket maximum will be dramatically reduced.
In 2024, the total annual out-of-pocket limit was $8,000. For 2025, it is only $2,000.
You’ll now have access to a Medicare Prescription Payment Plan.
This will allow you to spread your out-of-pocket prescription costs out over the year rather than pay high out-of-pocket costs at the time they are incurred. To set up a payment plan, visit your plan’s website or call the customer service phone number on their website.
Pricing Changes
Here are the price updates for various elements of Medicare Part D for 2025. This list now only includes the initial deductible and an RxMOOP (maximum out-of-pocket limit for formulary prescriptions) because the Initial Coverage Limit (ICL) and the Coverage Gap (aka the Donut Hole) have been eliminated.
- The initial deductible will increase by $45 for 2025, to $590. This means you’ll pay slightly more before Medicare Part D begins paying its share if you have a plan with the highest possible deductible. After your deductible is met, you’ll pay a co-pay that varies based on the type of drug and your income. You’ll be responsible for those co-pays until you meet your RxMOOP (maximum out-of-pocket limit for formulary prescriptions).
Some plans may offer a $0 deductible for lower-cost (Tier 1 and Tier 2) drugs. In this case, you’ll just pay a small co-pay for these drugs, even if you have not met your deductible yet. Vaccines are typically free of charge even if your deductible isn’t met yet, and insulin is always available with a $35 co-pay.
- RxMOOP (maximum out-of-pocket limit for formulary prescriptions) is now only $2,000 per year. This means that after you incur $2,000 in out-of-pocket costs for prescriptions included in your Medicare formulary, you will not pay anything extra for formulary drugs through the end of the year.
To understand more about the Medicare Part D changes for 2025 and what they mean for you, talk to your pharmacist at your local Good Neighbor Pharmacy.