The end of the year always brings about changes that will be implemented as soon as the clock strikes midnight in the new year. Seniors are some of the most interested in these changes, as they are the ones affected the most by updates to Medicare, Social Security and even taxes.

Changes to Medicare in 2025

If you are an American over 65, you are entitled to receive Medicare benefits, and one of the perks of these benefits is the partial coverage of prescription drugs. The most significant change that the program will implement going forward is a $2,000 cap on out-of-pocket prescription drug costs, which will also be accompanied by a new program designed to help enrollees spread out their medication costs over the course of the calendar year, deferring some of the most challenging costs and helping them budget better.

Both of these changes are a part of the Inflation Reduction Act (IRA), which is being slowly implemented. The Act was implemented by the Biden-Harris administration as an all encompassing proposal to improve climate and health law in the U.S. It is considered to be one of the most important accomplishments of their administration, and the measures that it contains will continue to expand and be implemented until 2027.

Amy Niles, Chief Mission Officer of the PAN Foundation, commented when being asked at a Tuesday event hosted by The Hill about 2025 Medicare drug benefits “If you are someone living with a serious illness or illnesses and you have been historically used to high out-of-pocket costs, that $2,000 cap is welcome news. Albeit it is still quite a bit of money for many Americans … it is still going to be a struggle for many communities.”

The good thing about this cap is that it kicks in automatically for seniors, there is no application process or receipt submission necessary. Once the $2,000 limit is spent on deductibles or copayments the rest of their Medicare Part D drugs will be free. The downside is that, to benefit, you will have to be enrolled into the new Medicare Prescription Payment Plan, which not everyone is aware of.

As we have stated, this plan will help spread out the cost of prescription drugs across the 12 months of the year, which is especially important for those who are on a lot of costly prescription rugs. If you do the math, $2,000 dollars at the beginning of the year translates to $167 per month, and even if you don’t hit the cap that soon, the amount to pay will still be a more manageable number. This will protect seniors’ budgets and allow them to prepare better, especially since the bill will come through their insurance company and not at the pharmacy counter.

To better inform seniors about the changes in the program, some states, like the state of Maryland, have partnered with senior centers and older adult education centers to educate the older population on the changes that are happening, but not everyone thinks this is enough.

Tom Kornfield, founder and CEO of MAST Health Policy Solutions, said he thinks the federal government should do more to help inform people when they are making such complex changes. “When the government implements a policy they need to lean into it and they need to follow through on it. And I’m not seeing that kind of commitment from CMS [the Centers for Medicare and Medicaid Services

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]. I think it’s unfortunate … I feel like that’s a missed opportunity. Really look at your plans, shop around. There’s a chance if you don’t take action, your premiums will go up.”