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Medicare Part D

Q&A: Medicare Part D Premiums: Balancing Costs and Coverage in 2025

December 23, 2024 By Liz Weston

Dear Liz: I would like to comment on your response to the letter about the high cost of Medicare Part D prescription drug coverage. You correctly noted the $2,000 cap on covered drug costs, starting next year. However, there is no cap on the cost of the monthly premiums. My cost for the Part D monthly premium went up about 25% for the 2025 year. So, although my annual out-of-pocket expense for my prescription drugs will be less in 2025, my total costs including premiums will be higher when compared to 2024.

Answer: The original writer implied that Medicare’s prescription drug coverage is always expensive, when in reality people’s costs vary depending on the drugs they take and the coverage offered by the private insurers they choose.

Monthly premiums for Part D range from $0 to more than $100, according to KFF, the nonprofit health research firm. The average premium for a stand-alone Part D plan is projected to decrease from $41.63 in 2024 to $40 next year, according to the Centers for Medicare & Medicaid Services.

As noted in a previous column, insurers are constantly changing their “formularies” of the drugs they cover. That’s why it’s important to shop each year during Medicare’s open enrollment to make sure you’re getting the best deal.

Filed Under: Medicare, Q&A Tagged With: drug costs, Medicare, Medicare drug costs, Medicare Part D, Medicare prescription drug plan, prescription costs, prescription drugs

Q&A: Why Shopping for the Right Medicare Plan Matters

December 2, 2024 By Liz Weston

Dear Liz: In the past, you’ve discussed the pros and cons of Medicare Advantage plans versus original Medicare. There is one more point I think you need to tell readers, and that is the high cost of Part D prescription drug coverage for people who choose original Medicare. For example, if you need just a few expensive drugs that are Tier 3 or higher, coupled with the monthly premium, you can easily pay $3,000 a year or more. I am not saying original Medicare is bad. On the contrary, it gives you great freedom of health choice. However, Part D is expensive.

Answer: Let’s start with the news that in 2025, Medicare Part D will have a $2,000 out-of-pocket maximum. The cap applies to Part D plans purchased by people on original Medicare as well as to Medicare Advantage plans that have prescription drug coverage. Once you hit the limit, you won’t have to pay more for covered drugs for the rest of the year.

Note the phrase “covered drugs.” Prescription drug coverage is provided by private insurers, and their lists of covered prescriptions can change every year. An insurance plan that covers a drug this year may not cover it next year, so every year during Medicare’s open enrollment — which ends Dec. 7 — you should be shopping to make sure your plan provides the coverage you need. If you don’t comparison-shop during the annual open enrollment period, you can wind up paying substantially more than you expected.

As background, Medicare Advantage plans are provided by private insurers as an alternative to original Medicare. Whereas original Medicare allows you to choose any doctor who accepts Medicare — and the vast majority do — Medicare Advantage has provider networks and may not cover care outside those networks, or may charge more. Also, Medicare Advantage networks and benefits can change from year to year.

Fortunately, Medicare offers a comparison tool to help you sort through your options. Entering the drugs you take and your preferred pharmacy can help you select the best plan for your circumstances. Now’s the time to compare and switch plans if necessary.

Filed Under: Medicare, Q&A Tagged With: Medicare, Medicare Advantage, Medicare open enrollment, Medicare Part D, Medicare prescription drug plan, Part D, prescription costs, prescription drugs, prescriptions

Thursday’s need-to-know money news

November 3, 2016 By Liz Weston

22856641_SAToday’s top story: How new grads should handle their student loans. Also in the news: 7 in 10 people would boycott a bank that rejected them for a credit card, why medical crowdfunding campaigns are rarely successful, and how to pick the right Medicare Part D plan.

New Grads Owe New Debts in November. How to Handle Yours
Your grace period is over.

Rejected for a Credit Card? 7 in 10 Would Boycott the Bank, Survey Finds
Taking it personally.

Just 11% of Medical Crowdfunding Campaigns Are Fully Funded, Study Finds
Taking desperate measures.

5 Steps to Picking the Right Medicare Part D Plan
Working through the open enrollment maze.

Filed Under: Liz's Blog Tagged With: banks, Credit Cards, crowdfunding, Medicare Part D, Student Loans

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