“5 Key Changes to Medicare Under the 2025 Inflation Reduction Act”
TL/DR –
In 2025, two major changes to Medicare will take place as part of the Inflation Reduction Act. The first is capping out-of-pocket costs for prescription drugs at $2,000 annually for beneficiaries. The other, a cost-smoothing program, allows beneficiaries to spread out high one-time costs over the year. Premiums bids from Part D plans have increased, resulting in a plan by CMS to reduce base premiums to $15 a month for 2025, costing $5 billion.
Medicare Changes in 2025: What You Need to Know
Under the Inflation Reduction Act, two significant Medicare changes are set to take effect in 2025. These changes will impact the cost and coverage of prescription drugs for Medicare beneficiaries.
Five Key Points About the 2025 Medicare Changes
These are the major changes coming in 2025:
- Starting 2025, Medicare beneficiaries’ out-of-pocket cost for prescribed medication will have a cap of $2,000 annually.
- Higher premiums bids are expected from Part D plans, with an increase of 179% from 2024 to 2025, as reported by the Congressional Budget Office.
- In an effort to stabilize premiums, CMS proposed a plan in August, attracting most insurers, which mandates reducing base premiums to $15 monthly in 2025. This would result in CMS bearing more risk for potential losses, costing an estimated $5 billion in 2025.
- Medicare beneficiaries can opt for a cost-smoothing program from 2025, distributing high one-time costs across the year.
- In 2024, CMS published negotiated prices for the 10 most expensive drugs without generic or biosimilar alternatives. These prices will come into effect in 2026.
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