Medicare’s $2,000 cap on out-of-pocket drug costs will actually cost most members more money

Medicare Part D beneficiaries will have a $2,000 cap on out-of-pocket costs for covered drugs starting in 2025 — but where some people will save, others will inadvertently pay, an author and Medicare expert says.

Philip Moeller, author of “Get What’s Yours for Medicare,” said the cap would affect perhaps 10 percent of Medicare beneficiaries, “if even that much.” While having a cap on how much you can spend on out-of-pocket drug costs might be welcome, most beneficiaries don’t hit that cap to begin with, he noted, and only patients with very expensive drugs will benefit.

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“For them, it’s a big deal because many pay many times that much,” he said. “Drug companies that have to absorb them are looking for ways to offset those extra expenses. So for the 90 percent who are not directly affected, they should look for other changes in Part D plans.”

Moeller’s revised edition of his Medicare book will be available starting Oct. 8 and includes updates to Medicare coverage, including drug plans, private Medicare Advantage options, and additional changes to the system. The $2,000 cap on drugs, for example, was one of the provisions introduced under the Inflation Relief Act passed in 2022.

As open enrollment approaches, beneficiaries should pay close attention to changes to their Part D plans, as well as look at the details of any new plans they are considering. Open Enrollment begins October 15th and ends December 7th.

With drug costs capped at $2,000, the law changed who pays over the cap, Moeller said. Part D enrollees with expenses over $2,000 will be considered for a “catastrophic coverage” phase. Currently, Medicare pays for 80 percent of total drug costs for anyone in that category, but in 2025, it will pay just 20 percent, with Part D paying 60 percent and drug manufacturers paying the remaining 20 percent. As a result, plans will look for ways to recapture the money.

Those who may not benefit as much from the cap should look at the details of a plan. They can do that on Medicare’s website, which was recently updated with 2025 plan options. The site provides information about plans available in the user’s area and also allows users to enter their specific doses and prescriptions. need.

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Medicare Advantage options may look more attractive next year because of the Part D plan changes, Moeller said, because those plans receive subsidies they can use to offset consumer costs. At the same time, some Medicare Advantage plans are withdrawing from marketplaces or reducing coverage in areas such as dental, vision and hearing, Moeller added. Regardless of the options, enrollees should pay attention to every detail, he said.

A few things to keep an eye on this season: if deductibles or co-pays are higher, what categories the drugs they need fall into (since many plans have multiple tiers of drugs), and prices for generics and brand-name prescriptions .

“I would urge them to be careful when shopping,” Moeller said. “Don’t just look at the low premiums, look at the other costs as well.”

Even enrollees with plans they like should check to see if their coverage changes at all for next year, which they can do by reading the Annual Notice of Change documents their insurance companies send out each year. Then they can at least compare their current coverage with other options.

More than half of Medicare beneficiaries have never changed plans, according to a recent eHealth report, but staying with the same plan can cost patients thousands of dollars if they’re not careful.

“Don’t assume next year is going to be like this year,” Moeller said.

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