Medicare Part D. New year. Big changes. (Nov. 2023)

As we approach the new year, there are important changes on the horizon for Medicare Part D that could have a positive impact on your prescription drug costs.

Some of these changes went into effect this year. Some, set to take effect in 2024, hold the potential to bring significant savings to millions of Medicare beneficiaries. Other changes are coming in 2025.

Let’s take a closer look at what’s in store.

Savings ahead

The upcoming changes to Medicare Part D can bring good news for many.

How many, you ask?

According to government estimates, 36% of beneficiaries — roughly 18.7 million people — are projected to see their out-of-pocket expenses decrease. Once the changes are fully implemented in 2025, those who benefit from these savings are expected to see an average decrease of $396. This could mark a welcome relief for those who rely on prescription drugs.

Of these four updates, the first two went into effect this year. The next two begin starting in 2024. Each bring about a range of improvements to Medicare’s prescription drug coverage, each designed with the aim of putting more money back in people’s pockets.

Four changes to Part D since January 1

1. Expanded vaccine coverage

   Under the new law, Medicare Part D recipients with drug coverage no longer need to worry about copayments or deductibles for a broader selection of vaccines. These vaccines encompass a variety of vital immunizations. They include vaccinations for shingles, whooping cough, and more.

2. Affordable insulin access

   One change that received plenty of headlines is the elimination of deductibles for insulin. If you’re on a Medicare drug plan, the cost of each Part D-covered insulin supply is capped at $35 for a one-month supply. This adjustment also applies if you’re benefiting from Extra Help, which helps you lower your prescription drug expenses. And if you typically opt for a 3-month insulin supply, your expenses don’t exceed $105, amounting to $35 per month.

3. Reduced out-of-pocket drug costs

   Starting in 2024, enrollees will no longer have a copay or coinsurance if they reach the catastrophic coverage phase in Medicare drug coverage. For those who meet the catastrophic threshold, this could lead to substantial savings.

4. Enhanced assistance for lower incomes

   For people with limited resources, the Extra Help program will undergo expansion in 2024. This program, also known as the Part D Low-Income Subsidy program, previously only provided coverage of enrollees making less than 135% of the federal poverty level. Starting next year, the program will cover people up to 150% of the federal poverty level.

But wait! There’s more!

And while these will be welcome to many Medicare Part D enrollees, there are even more consumer-friendly changes coming in 2025. These include allowing people to pay out-of-pocket expenses through monthly payments and an annual limit for out-of-pocket costs of $2,000.