With this change in effect, Part D enrollees who take only brand-name drugs in 2024 will have a cap of about $3,300 for calendar year 2024, according to a February 2024 Kaiser Family Foundation brief.
Out-of-pocket costs
will be capped at $2,000 in 2025. You'll also have the option to pay out-of-pocket costs in monthly amounts over the plan year, instead of when they happen.
In 2024, for example, you reached the Part D donut hole when you and your plan had paid $5,030 for your medications. Prior to 2019, if you reached the coverage gap, you would have to pay 100% of your prescription drug costs in that period until you met the catastrophic coverage period spending threshold.
For the 2024 plan year: The out-of-pocket limit for a Marketplace plan can't be more than $9,450 for an individual and $18,900 for a family.
Thanks to the Inflation Reduction Act, in 2025 annual out-of-pocket costs will be capped at $2,000 for people with Medicare Part D.
What happens when I reach my out-of-pocket maximum? When you reach your in-network out-of-pocket maximum, your health plan pays for covered healthcare and prescriptions for the rest of the year. Your plan will pay these costs only if the services and prescriptions are medically necessary.
One of the biggest changes takes effect in 2025, when Part D plans must cap out-of-pocket spending on covered drugs at $2,000 a year.
Key takeaways:
You may want to consider using GoodRx instead of Medicare when Medicare doesn't cover your medication, when you won't reach your annual deductible, or when you're in the coverage gap phase (“donut hole”) of your Medicare plan. GoodRx's prescription drug prices are frequently cheaper than Medicare copays.
Part D plan members will also enjoy the security of an annual maximum out-of-pocket cost for prescription drugs. All 2025 Medicare Part D plans feature a $2,000 maximum out-of-pocket cost. Once your out-of-pocket costs reach $2,000, your Part D plan will pay 100% for covered drugs for the rest of the plan year.
What is the Medicare deductible for 2025? The 2025 Medicare deductible for Part B is $257. This is an increase of $17 from the deductible of $240 in 2024. Once the Part B deductible has been paid, Medicare generally pays 80% of the approved cost of care for services under Part B.
In order to serve a Medicare patient, even if they want to pay out of pocket, [the clinics] have to have some sort of agreement with the patient. This law basically protects people who are sick right now and need care.
In 2025, the coverage gap will be eliminated, and annual out-of-pocket Part D costs are capped at $2,000. This means if you take high-cost medications covered by Part D, you could see major savings. After meeting the out-of-pocket limit, you pay $0 for covered drugs for the rest of the year.
Health systems have cited delayed reimbursements, cumbersome prior authorization requirements and high rates of patient claim denials for their decisions to drop Medicare Advantage plans.
A monthly Part D plan premium (average estimated premium in 2024 is $46.50) An annual deductible (maximum $590 in 2025)
A yearly cap ($2,000 in 2025) on out-of-pocket prescription drug costs in Medicare. Expansion of the low-income subsidy program (LIS or “Extra Help”) under Medicare Part D to 150% of the federal poverty level starting in 2024.
Disadvantages of Medicare Advantage plans can include difficulty switching out of the plans later, restrictions on care access, limited provider networks, and limitations on extra benefits.
The Medicare Part D donut hole or coverage gap phase of coverage no longer exists as of December 31, 2024. It was the coverage phase after the initial coverage period when you owed a higher or different percentage of the cost of your drugs.
However, when the plan has paid up to a specified limit, the person has reached the donut hole. Once they reach this point, a person has to start paying for their medications again until they reach another specified amount. After this, their plan takes over payment once again.
on Part D drugs if you reach the catastrophic coverage phase, which begins at a threshold of $8,000 in what's called true out-of-pocket (TrOOP) costs. For most people, you'll contribute roughly between $3,300 and $3,800 toward the cap of $8,000, and then pay $0 for your covered Part D drugs for the rest of the year.
An out-of-pocket maximum is a cap, or limit, on the amount of money you have to pay for covered health care services in a plan year. If you meet that limit, your health plan will pay 100% of all covered health care costs for the rest of the plan year. Some health insurance plans call this an out-of-pocket limit.
The average out-of-pocket limit for in-network services has generally trended down from 2017 ($5,297), though increased slightly from $4,835 in 2023 to 4,882 to 2024. The average combined in- and out-of-network limit for PPOs slightly increased from $8,659 in 2023 to $8,707 in 2024.