With a decline in pension plans, an increasing number of individuals are depending on 401(k)s and IRAs, while still placing significant trust in Social Security and Medicare. Last year, over 71 million individuals were benefiting from the Social Security Administration. Recently, Medicare has been providing coverage for over 67 million individuals.
As you near retirement or contemplate your plans, it’s important to stay informed about the programs and their updates. Six upcoming changes for Medicare in 2025.
Bid Farewell to the “Donut Hole”
If you’re somewhat acquainted with Medicare, you may have heard of the “donut hole.” This is the time after you and your medication insurance plan have reached a specific amount on prescriptions when you need to pay out of pocket until another amount is reached, at which point your insurance coverage will start again.
Beginning in 2025, the donut hole will be eliminated, introducing a yearly limit of $2,000 for out-of-pocket expenses on prescription medications.
Spread Out Medication Costs
When you visit your pharmacy to collect your medications, you usually need to settle your portion at that moment. Starting in 2025, you’ll have the option to divide payments into several installments. This can be useful when the cost of a medication is high, as some can be.
Changes to the Premium for Part B of Medicare
There are two types of Medicare coverage available, and it’s advisable to enroll in one as you near the age of 65. One choice is “original” Medicare, which includes Part A (hospital coverage) and Part B (physician/medical insurance). Enrollees often enhance this with a Part D prescription drug plan and occasionally a Medigap supplemental coverage plan as well.
An alternative is a Medicare Advantage plan, also known as Part C. Insurance companies provide these plans, and while they are not government programs, they must legally offer at least the same level of coverage as original Medicare. Typically, they also include additional benefits like vision, hearing, and dental care.
Both options have their advantages and disadvantages, but keep in mind that whichever one you select, you’ll be responsible for a premium for Part B. This premium typically sees annual adjustments, often resulting in an increase. It seems that the Part B premium for 2025 may increase slightly compared to 2024.
Mental Health also Covered
Numerous individuals enrolled in Medicare are facing challenges in locating accessible mental health providers. Positive changes are on the way. Starting in 2025, an increased number of mental health providers will be allowed to assist Medicare enrollees. Professionals in this field consist of addiction counselors, licensed mental health counselors, and marriage and family therapists.
Weight-loss Medication Availability
Historically, Medicare has not authorized medications for weight management. However, certain plans under Part D and some Medicare Advantage options may allow these medications when they are prescribed for different uses.
Recently, popular weight-loss medications like Mounjaro and Ozempic are available for diabetes patients, while Wegovy has received FDA approval for individuals with obesity and cardiovascular issues.
In 2025, your healthcare provider may have the option to prescribe a medication that aids in weight loss and offers additional advantages.
Save Money on your Prescriptions
This change will be implemented in 2026, but it’s significant, and you can anticipate it during 2025. The Inflation Reduction Act of 2022 allowed Medicare to negotiate drug prices with pharmaceutical companies, leading to reduced prices for 10 widely used medications, including Januvia and Entresto, which address diabetes and heart failure, respectively. These lower prices will take effect in 2026. Prices have dropped significantly, ranging from 38% to 79% off
Hold on — there’s additional information! Fifteen additional drug prices will be negotiated for 2027, followed by another fifteen for 2028, and twenty more for 2029 and the years that follow. In the coming years, many commonly prescribed medications are expected to experience a decrease in prices, frequently by a considerable amount.
Several updates have been revealed regarding Medicare. Stay tuned for upcoming announcements that promise to enhance retirement options in the near future.