The new year means new rates and new rules for the Medicare system. If you’re enrolled in Medicare, you’re likely already aware of some of these changes—the monthly part B premium has climbed from $174.70 to $185, for example, and higher premiums are precisely the sort of change that tends to catch people’s attention. The Part B deductible has been boosted as well, from $240 to $257.
But those relatively modest increases in premiums and deductibles are far from the most substantial Medicare modifications for 2025, explains Medicare expert Lauren Bigham Steele. Several other changes could mean much more to Medicare enrollees’ bottom lines and, in some cases, even could affect their ability to obtain the medications and health care they need. Among the most notable Medicare changes for 2025…
In 2025, annual out-of-pocket costs for covered prescription drugs with a Medicare Part D or Medicare Advantage plan are capped at $2,000. Once a Medicare enrollee reaches that $2,000 figure, the rest of his/her medications will be 100% covered for the remainder of the year, with no further need to make co-pays at the pharmacy. Previously, Medicare annual out-of-pocket medication costs could total as much as $8,000.
But there are a few points worth noting here…
That $2,000 cap applies only to drugs that are covered by a Medicare enrollee’s Part D or Medicare Advantage plan. If a drug is not included in a plan’s formulary, it will not count toward the enrollee’s annual $2,000 out-of-pocket cap, and he likely would have to pay the full cost of the medication.
The $2,000 out-of-pocket max applies only to prescription drugs purchased using Medicare Part D or a Medicare Advantage plan’s prescription drug coverage. It does not apply to drugs that are instead covered by Medicare Part B, including certain drugs administered by injection in health-care provider offices…nor does it apply to drugs purchased using a third-party drug discount plan, such as GoodRx. Tip: It might make sense to use your Medicare coverage to fill a prescription in 2025 even if GoodRx offers a lower out-of-pocket price for that prescription. By using Medicare, you will climb closer to the $2,000 mark beyond which virtually all your further prescription drugs will be completely covered for the remainder of the year. Prior to 2025, the money-smart move for Medicare enrollees who didn’t take expensive medications often was to take advantage of programs like GoodRx when those programs offered a lower out-of-pocket price for a prescription than Medicare.
A Medicare program that provides much needed help to family members who are caring for Medicare-enrolled dementia patients will be dramatically expanded in mid-2025. The program, called Guiding an Improved Dementia Experience (GUIDE), launched in 2024 but originally was available in only a very limited number of locations. GUIDE provides access to a range of services, including caregiver training, 24-hour phone-based support and “respite care”— coverage for a limited amount of adult day care so that the family caregivers can take breaks. For more information about GUIDE’s services and a list of participating: CMS.gov/priorities/innovation/innovation-models/guide.
Medicare is prohibited by law from covering medications that have been prescribed for the purpose of weight loss…but that doesn’t necessarily mean Medicare never covers weight-loss drugs. These drugs can be covered when they’re prescribed by doctors for the treatment of health conditions other than obesity—even if the primary way these drugs treat those health conditions is through weight loss. Examples: Mounjaro and Ozempic are weight-loss drugs, but they also have been approved by the FDA for the treatment of type 2 diabetes. And now the weight-loss drug Wegovy has been approved as a treatment for patients at elevated risk for cardiovascular disease. A significant percentage of Medicare enrollees who would like to lose weight either have type 2 diabetes and/or are at significantly elevated risk for cardiovascular problems such as heart attack or stroke—which means they could potentially qualify for Medicare coverage of one of these otherwise extremely expensive weight-loss drugs. Note: Just because Medicare Part D and Medicare Advantage plans can cover weight-loss drugs for purposes other than weight loss does not guarantee that they will do so—some plans do not include these pricey drugs in their formularies, and even those that do include them often require substantial co-pays. Before asking your doctor if Wegovy could help you control your elevated cardiovascular disease-related risk…or if Mounjaro or Ozempic could help you control your type 2 diabetes…confirm that your Part D plan or Medicare Advantage plan covers the drug for this use and determine what your out-of-pocket costs would be if it does.
Down the road: As of December 20, 2024 the FDA has approved Eli Lilly’s Zepbound for sleep apnea. Zepbound shares the same active ingredient—tirzepatide—with the weight-loss drug Mounjaro. This raises the prospect of more GLP-1 weight-loss drugs to be approved for the treatment of sleep apnea. Likewise, legislation has been discussed that would allow Medicare to cover weight-loss drugs even when they’re prescribed for their most obvious purpose—weight loss. But it does not currently appear likely that such legislation is likely to be passed soon.
The Medicare system greatly expanded its coverage of remotely provided health-care services during the pandemic, but most of this telehealth coverage expired at the end of 2024. There are two key exceptions…
Behavioral and mental health services that are provided via telehealth will largely continue to qualify for Medicare coverage.
Telehealth health-care services—not just behavioral and mental health—will continue to be covered for Medicare enrollees who live in certain qualifying rural areas or other areas where access to in-person health care is very limited. It is not always easy to determine which areas qualify under this rural rule—contact Medicare at 800-633-4227 to ask if your address qualifies before obtaining telehealth services in 2025.
Starting this year, a new program known as the Medicare Prescription Payment Plan will allow Medicare and Medicare Advantage enrollees to spread their out-of-pocket costs for covered prescription drugs over the course of the year. As noted above, Medicare enrollees’ annual out-of-pocket cost for covered prescription drugs now is capped at $2,000—but someone who takes several expensive drugs could easily incur that full $2,000 expense in just the first month or two of year, which could create cash-flow problems. Opting into this program distributes these out-of-pocket drug costs over the full year—$2,000 in prescription drug copays incurred early in the year could be transformed into monthly bills of less than $200, for example. The Medicare enrollee would make these monthly payments to his Part D or Medicare Advantage plan provider, with no interest charges or other added costs. But beware—failing to make these monthly payments could result in having one’s Part D or Medicare Advantage coverage cancelled. Helpful: If you didn’t enroll in this Prescription Payment Plan when you chose your drug coverage for 2025, you can do so at any point during the year by contacting your Part D or Medicare Advantage plan provider.
