Medicare’s open enrollment period has arrived, and eligible beneficiaries have until Dec. 7 to make any changes to their current Medicare plan so that they have the coverage they need for the next year. And although there are some changes that happen every year, in 2025 there will be some all-encompassing reforms that beneficiaries will have to take into account in order to have the best plan for their needs.

Since the enrollment period is in full swing, this is the time to figure out the changes and how they will affect your specific needs and plan. Here are some of the most important changes that you should know about.

There’s a new cap on Part D coverage

Medicare Part D is the one that ensures prescription drug coverage. It is optional coverage beneficiaries can buy from a private health insurance company and offered to everyone with access to the program. But there are some limits to what Part D offers, until now there was a “donut hole coverage model” where companies covered the cost until a cap, then out of pocket expenses and once you reached a level of expense the “hardship model” started and you would be covered again.

Now, this “donut hole coverage model” has been eliminated and there’s a new cap on out-of-pocket spending for prescription drug coverage thanks to the implementation of the Inflation Reduction Act.

Form now on, there will be three levels of coverage for Part D. The first is your deductible, which is now capped at $590 per year. You will need to pay this deductible out-of-pocket before Part D starts covering prescriptions. The second part is that during your initial coverage phase, you will pay 25% of overall drug costs until you hit a $2,000 out-of-pocket spending limit by paying for covered drugs. After that, all covered drugs will be paid for by the insurance company.

This is the minimum that the law has decided must be covered. Some insurance companies may offer more generous policies, but this is meant to guarantee that those who depend on costly medication have to pay less overall.

Medicare Part D premium prices could increase

Given the fact that insurance companies would have to spend more to accommodate the change in drug coverage, lawmakers were understandably weary of the fact that they would push the increase in price to consumers, which would only compound the program. To solve this issue before it became a problem to consumers, the Biden administration instituted a program subsidizing those plans and capped insurance rates increases at $35 a month.

Some insurance companies have decided that this is not enough to cover the increase in expense and have announced their exit from some of the least profitable markets, so do take that into account and explore your options while you still have time.

A Medicare Prescription Payment Plan option is available

The last big change is the introduction of a Medicare Prescription Payment Plan, which could alleviate the burden of out of pocket expenses for those who are on high-cost medications and have to make upfront payments.

This new payment plan aims to help beneficiaries spread out their expected costs throughout the year in order to help them budget better. This would mean that if they reach the $2,000 out of pocket cap

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early in the year, they can choose to divide those payments over 12 months so as to not have their budget ruined or their financial imperiled. It will help a lot of struggling seniors not to depend on high interest temporary loans or avoid dipping into their savings accounts in an excessive manner.