The Medicare Part D Spending Cap
Justin Sonon • February 12, 2025
Changes to Medicare Prescription Drug Plans
Starting in 2025, Medicare is introducing a new $2,000 out-of-pocket cap on prescription drug spending for enrollees in Medicare Part D. This cap is a result of the Inflation Reduction Act and is designed to limit the financial burden of high-cost medications.
View Prescription Drug Plans
How It Works:
1. Annual Out-of-Pocket Cap:
Once your total out-of-pocket spending on Part D drugs reaches $2,000, you won’t have to pay anything more for covered prescriptions for the rest of the year.This replaces the current system, which has a catastrophic phase where patients still pay a percentage of drug costs.
2. Monthly Payment Plan (New Option):
Medicare will offer an option to spread out drug costs over the year rather than paying large sums at once.This can help enrollees manage expenses more predictably.
3. Who Benefits the Most?
Beneficiaries with high prescription drug costs—especially those taking expensive specialty medications.
Anyone who previously spent more than $2,000 annually on prescriptions.
4. How to Prepare for 2025:
Review your current Part D or Medicare Advantage plan to see how it covers your medications.
Look into enrollment options for the new monthly payment plan if you prefer spreading costs over time.
Stay updated with your plan provider on any changes in premiums, formularies, and copays.
5. Does using GoodRx count towards the spending cap?
No. In order to reach your spending cap, you must only use your Medicare prescription drug plan.
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