Phases of Coverage: 2025 Changes for Medicare Perscription Drug Coverage Part D

Part D Plans and drug manufacturers will have to pay much greater cost sharing than in previous years for those people who reach the out of pocket maximum of $2000.

There will now only be 3 phases of coverage (the Coverage Gap OR Doughnut Hole will be removed for 2025).

Deductible anywhere from $0 to $590 depending on the plan you choose

Medicare Advantage plans are more likely to have a $0 prescription drug deductible than stand alone prescription drug plans.

Usually the higher cost stand alone plans are more likely to have $0 or low deductibles than the lower cost plans.

Initial Coverage Phase (copays or coinsurance – which is a percentage of the drug cost). Copays, usually on Tier 1, preferred generics and Tier 2, Standard Generics

Coinsurance (a % of Cost, e.g. 25%, 50%, 33%) on Tier 3 Preferred Brand; Tier 4 Non –Preferred Brand; Tier 5 Specialty Drugs; and Tier 6 other medications/insulin. Tiers 3 through 5 may also include High Cost/Non-Preferred Generic Drugs

This phase lasts until you reach the $2000 maximum out of pocket.

Cost sharing for members will be equal to 25%; manufacturers will discount 10%; and Part D Plans (insurers) will pay 65% of the medication costs – sound confusing?

$2000 out of pocket maximum reached by the member – the member will pay no more for medications covered under their Part D plan

The insurer will now pay 60% of the enrollee’s drug costs, manufacturers will now pay 20% and Medicare will pay 20% of the cost of any future drugs for the year (January 1 through December 31, 2025).

For 2026 the out of pocket maximum could go higher, indexed to inflation.