Changes to Medicare in 2025

When people enroll in Medicare or choose Medicare Advantage or Part D insurance coverage, they often make their selection and then simply let that initial plan renew without reviewing whether it still meets their needs. In 2025, significant changes to Medicare—some positive, others less clear—make it imperative that Medicare beneficiaries carefully look over how their plan may be affected and, if necessary, find alternatives that will better meet their needs going forward.

What can Medicare participants expect going forward? Here are key changes to be aware of and what to do if your coverage is affected.

How Medicare Is Changing in 2025

Key changes to Medicare are designed to reduce prescription drug costs, make costs more predictable, and ensure that enrollees in Medicare Advantage plans are taking advantage of the full range of benefits available to them. However, it is anticipated that insurers may change pricing, procedures, and the availability of certain medications to contain costs associated with these changes. These changes include:

Limit of $2,000 for Out-of-Pocket Part D Prescription Drug Spending: In 2025, Medicare Part D phases will change, eliminating the “donut hole” coverage gap before catastrophic coverage kicked in. Now if your Part D or Medicare Advantage plan has a deductible, you’ll pay 100% of drug costs until you reach $590 (deductible phase). In the initial phase, you’ll pay 25% of the cost of covered prescription medications until you’ve reached $2,000 out of pocket. After that, catastrophic coverage kicks in and you’ll pay nothing else out of pocket for medications until the end of the year. (Limits will increase in future years due to inflation.)

Plans Including Part D May Increase Costs or Reduce Coverage: In conjunction with the new limit on out-of-pocket costs, insurers also received only a limited increase in government payments for 2025. As a result, they may change premiums, copays, and drug formularies to attempt to limit their costs. Patients should pay careful attention to changes in which drugs are covered or changes to the procedures to get approved for medications.

Optional Plan to Pay Drug Copays and Coinsurance Over Time: In 2025, patients will be able to opt in to a plan to pay for medications over a period of months rather than having to pay everything when prescriptions are picked up from the pharmacy. This could help with budgeting, particularly for patients who rely on multiple or expensive prescriptions.

Part B and Standalone Part D Premiums May Change: Part B premiums (which cover doctors’ services, lab tests, and outpatient care) change each year, and they are likely to increase in 2025. Standalone Part D plan premiums may increase too, but plans participating in the government’s “demonstration” plan to stabilize premiums will be limited to a $35 year-over-year increase in premiums, in exchange for government subsidies to help contain costs.

Other Standalone Part D Costs May Increase: While premium costs for most Part D plans sold outside of Medicare Advantage may not be able to change much in 2025, other costs may change. For example, new deductibles may be added, or certain drugs may switch from a flat copay to a percentage cost (coinsurance). Formulary drug tiers may also change.

Midyear Notice for Unused Medicare Advantage Benefits: In summer 2025, enrollees in Medicare Advantage plans will receive a personalized “Mid-Year Enrollee Notification of Unused Supplemental Benefits” letter detailing any supplemental benefits (such as dental or vision) that were not used in the first six months of the year. It will include information such as the benefit’s scope, cost-sharing, and how to access the benefit.

Increased Access to Biosimilar Drugs: Biosimilar drugs are those that are close in structure and function to an original biological medication (unlike generics, which are bioidentical). Often biosimilar drugs are less expensive than originals. The Centers for Medicare Services are finalizing changes that will make it easier for Part D insurers to make midyear biosimilar drug substitutions for FDA-approved formulary products.

Changes to Availability of Mental Health Professionals: Beginning in 2025, more mental health professionals will be able to enroll as Medicare providers. This will include licensed mental health counselors (LMHCs), licensed marriage and family therapists (LMFTs), and addiction counselors.

Medicare Advantage Plans Must Analyze Impact of Prior Authorizations: Prior authorization is almost always required for Medicare Advantage patients to access higher-cost services. These requirements impose barriers to obtaining care, delaying it even when a denial is overturned, and the number of denials has risen in recent years. In 2025, Medicare Advantage plans will be required to analyze the impact of these policies on certain at-risk populations and publicly display the results on their website. In January 2026, insurers will also be required to shorten the response time to a prior authorization request from 14 calendar days to 7 calendar days.

Helping You Navigate Medicare Changes

If you’re not sure what these changes mean for your coverage, or you’re new to Medicare and aren’t certain which plan will be best for your health needs, Medical Insurance Today can help. Traditional Medicare does not cover dental or vision—we can assist you in choosing an affordable option that ensures you will be able to get treatment to stay healthy. Our licensed agents cut through the jargon with easy-to-understand explanations in English and Spanish. We’ll take the anxiety and uncertainty out of getting the right Medicare coverage. To get started, contact us here today.

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