
Medicare 2025: Huge changes impact everyone on Medicare
Medicare 2025: Huge changes impact everyone on Medicare
Alexis Pepple, MBA
The Inflation Reduction Act of 2022 has provisions pertaining to Medicare prescription drug coverage. We have seen small changes in 2023 and 2024, but much more significant changes will impact 2025 Medicare plans.
Here is a chart from Kaiser Family Foundation outlining how the provisions roll out:

In 2025 the $2,000 cap is the maximum amount that Medicare enrollees will pay in drug co-pays beyond the deductible. This provision will benefit only an estimated 4 percent of Medicare enrollees, leaving the remaining 96 percent to feel the negative impacts of this cost reduction for a small portion of Medicare enrollees.
The maximum deductible for 2025 plans is projected to be $590. Many plans may have lower deductibles.
Let’s look at the ramifications for the insurance companies. They can only collect $2,000 + deductible from enrollees regardless of the expense of the drugs. This will have a huge negative impact on their bottom lines and cause a ripple effect to negatively affect patients.
We anticipate that the insurance companies will respond to this constraint by:
Increasing premiums on standalone Rx plans (double or triple!)
- Further degradation of the Rx formularies
- Fewer medications covered
- Tier 3 drugs most likely will go to a 25 percent copay as opposed to a specific dollar amount
- Decreasing other benefits on Medicare Advantage plans
- Discontinuing Rx or Medicare Advantage plans
Regarding the discontinuance of Medicare prescription drug plans, we have historic precedence for this scenario. In Colorado, two inexpensive Medicare Rx plans were discontinued from 2020 to 2021. The insurers informed enrollees of the discontinuance and stated that the enrollee would be automatically transferred to the insurer’s “most comprehensive” Rx plan; in other words: MOST EXPENSIVE! If the enrollee was not paying attention and did not actively enroll in an alternate plan the insurance company automatically moved them into that “most comprehensive” Rx plan, and the enrollee was stuck for the following year.
People who didn’t pay attention woke up in January 2021 to a bill for a Rx plan that went from $19 per month in 2020 to over $80 per month in 2021!
This same strategy is certain to be used for 2025 Rx plans and makes the 6 percent limit on premium increases meaningless because insurers will simply discontinue low-cost plans.
Take away
This will be the most important Medicare Annual Enrollment Period (AEP) in decades. All of your patients should compare their medication regiment to match to the best 2025 plan during AEP which runs from Oct. 15 to Dec. 7.
Patients may want to consider refilling prescriptions in November and December of 2024 if possible. Savvy sourcing is required; compare prices on GoodRx, Cost Plus and other sources with the copays on their Medicare Rx plan.
Pepple Insurance can help your patients as well as provide an educational lunch and learn for your staff.
Mary Jo Heins is a former medical practice manager and past president of Colorado Medical Group Management Association. Now she and her colleagues at Pepple Insurance are totally focused on Medicare. https://www.peppleinsurance.com 720-593-6155
Pepple Insurance is proud to be a Partner in Medicine with the Colorado Medical Society. https://www.cms.org/partners/Pepple-Insurance.