If you have Medicare, you know that the Annual Notice of Change (ANOC) you receive every fall describing upcoming changes to your Part D prescription drug plan isn’t usually scintillating reading. But this year’s ANOC might be more action packed than most — there could be big coverage changes in store for 2025.
Here are five Medicare Part D changes coming next year and what you need to know about them to be an informed shopper during open enrollment (Oct. 15 through Dec. 7).
1. Many plans are merging or ending
Medicare Part D plans for millions of members are being discontinued or merging with another plan in 2025 — especially for people with Aetna, AARP/UnitedHealthcare and Mutual of Omaha plans.
For example, if you had a low-cost Aetna SilverScript SmartSaver plan in 2024, you could be automatically moved into SilverScript Choice in 2025. You could see monthly premiums rise by as much as $35 unless you change plans.
It’s even possible to end up with no Part D coverage unless you act during open enrollment. Mutual of Omaha is leaving the market, for example, and its members will need to enroll in a new plan for 2025.
What to do about it: Check your ANOC to see whether Section 1 has a title starting with “Unless You Choose Another Plan.” If so, read the rest of the ANOC carefully to see whether the new plan is a good fit. Consider shopping around for alternatives during open enrollment.
If your Section 1 is titled “Changes to Benefits and Costs for Next Year,” then you’re not being automatically switched to a different plan — but it’s still a good idea to read the rest of your ANOC and confirm that you have the coverage you need.
2. Premiums are all over the place
The average member will pay $40 per month for a stand-alone Medicare Part D plan in 2025, down from $41.63 in 2024, according to September estimates by the Centers for Medicare & Medicaid Services (CMS).
While the average premium isn’t projected to change much, your own costs for Medicare Part D might be significantly different next year.
Monthly premiums for Wellcare’s Medicare Rx Value Plus plan, for example, are going up by nearly $28 in 2025, on average. But the Wellcare Classic plan is about $17 less expensive each month in 2025 than in 2024.
What to do about it: The “Summary of Important Costs for 2025” and “Changes to Benefits and Costs for Next Year” sections of your ANOC show how your plan’s premiums and other costs compare from 2024 to 2025. During open enrollment, shop around to see whether a better deal is available.
3. A new $2,000 out-of-pocket cap
Out-of-pocket costs for Medicare Part D are capped at $2,000 in 2025. That means once you’ve spent a total of $2,000 in 2025 on Part D deductibles, copays and/or coinsurance, you’re done paying out of pocket for the rest of the year.
And you might spend even less if you’re one of the roughly 75% of Part D members with an “enhanced” Part D plan, which could provide extra credit toward the out-of-pocket cap. (When enhanced plans have benefits that reduce your out-of-pocket spending, the value of those benefits can count toward the $2,000 total.) As a result, you might reach the cap before paying $2,000 in out-of-pocket costs, a CMS spokesperson confirmed in an email.
What to do about it: The new cap takes effect even if you stay in the same plan — you don’t need to do anything to get it. You also won’t need to do the math yourself: statements from your plan will show your progress toward the cap.
4. No more “donut hole”
The Medicare Part D “donut hole,” or coverage gap, will go away after 2024. Through 2024, the donut hole is a phase of Part D coverage when you owe up to 25% of the cost of medications rather than your plan’s copays and/or coinsurance.
Starting in 2025, there will no longer be a Medicare Part D coverage gap. You’ll pay your plan’s deductible, copays and/or coinsurance until you reach the new annual cap ($2,000 in 2025), then you’ll owe nothing out of pocket for the remainder of the year.
What to do about it: Nothing — the donut hole is gone for everybody in 2025, even if you stay in the same plan.
5. A payment plan for prescription drugs
The Medicare Prescription Payment Plan is a new, optional way to pay out-of-pocket costs over time rather than all at once. It works like a “buy now, pay later option” for Medicare Part D deductibles, copays and/or coinsurance.
The payment plan is a potential budgeting tool, not something that will save you money. Your total costs remain the same, and plans can’t charge fees or add interest because you participate.
What to do about it: Consider whether the Medicare Prescription Payment Plan would be a good fit for your budget. It might help if you have expensive medications and incur high out-of-pocket costs early in the year, for example.
All 2025 Medicare Part D plans will offer the Medicare Prescription Payment Plan, so there’s no need to change plans to enroll in the program.
Plans will be required to reach out to you if they identify you as someone who’s likely to benefit from the program. You’ll be able to sign up through your insurance company by mail, by phone or online.
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Alex Rosenberg writes for NerdWallet. Email: arosenberg@nerdwallet.com. Twitter: @AlexPRosenberg.
The article 5 Big Changes to Medicare Part D for 2025 (And What to Do About Them) originally appeared on NerdWallet.
