What You Should Know
The Inflation Reduction Act of 2022 led to some significant changes to Medicare that will become effective in 2025. When reviewing your existing plan and the costs associated with it, there are four key updates you should be aware of.
#1 – A $2,000 out-of-pocket maximum for prescription drugs
One of the most significant changes to be implemented in 2025 is a $2,000 annual out-of-pocket maximum for prescription drugs covered by Medicare Part D and Medicare Advantage plans. Once you’ve paid the $2,000 max, you will automatically receive “catastrophic coverage” and won’t need to pay for covered drugs for the rest of the year.
The $2,000 maximum applies to deductibles, coinsurance and copayments for eligible drugs. It doesn’t apply to premiums or drugs that aren’t covered by Medicare Part D. For example, chemotherapy or injections received at a doctor’s office are typically covered under Medicare Part B and aren’t included in the new out-of-pocket maximum.
Here’s how that $2,000 out-of-pocket maximum is reached:
- Deductible – If your Part D or Medicare Advantage drug plan requires a deductible, you’ll need to pay 100% of your prescription drug expenses until you reach $590, the 2025 deductible amount.
- Initial coverage – Once you’ve met the $590 deductible, you’ll pay 25% coinsurance for covered medications until you’ve reached the $2,000 out-of-pocket maximum.
- Catastrophic coverage – Catastrophic coverage kicks in once you’ve met the $2,000 maximum. At this point, you’ll pay nothing additional for your eligible prescription drugs during the plan year.
#2 – Additional access to family caregiver services
The GUIDE program (Guiding an Improved Dementia Experience) launched in 2024 to provide additional support for dementia patients and their caregivers. In 2025, the program will be expanded to support more caregivers throughout the country.
GUIDE provides:
- A 24/7 assistance line
- Care navigators who can connect patients and caregivers to medical services and community-based assistance
- Caregiver training
- Up to $2,500 per year to help pay for at-home, overnight or adult daycare services
In order to access these services, patients must be enrolled in original Medicare and have an official dementia diagnosis. Patients in a nursing home or hospice aren’t eligible.
#3 – Expanded access to weight loss drugs.
While Medicare is prohibited from covering drugs intended specifically for weight loss, Part D plans can now cover weight loss drugs when they’re prescribed to treat other conditions, such as cardiovascular disease, diabetes and sleep apnea. The availability of these drugs to treat various health conditions, combined with the $2,000 annual out-of-pocket maximum, means many more people may be able to access weight loss medications.
#4 – Easier access to mental health support.
Starting in 2025, licensed mental health counselors, addiction counselors and licensed marriage and family counselors will be eligible to enroll in Medicare as covered providers. In addition, Medicare will now cover more intensive outpatient mental health services at community mental health centers, hospitals and other locations. These changes will make it easier and less expensive to access mental health support.
