4 Changes Coming to Both Medicare Part D and Medicare Advantage in 2025

Part of a stress-free retirement is knowing that you can afford the cost of health care services. Medicare, the government's health insurance plan for individuals over age 65, is intended to help you do just that.

Elements of Medicare change every year, so it's important to know the latest information. Get familiar with these changes before the open enrollment period for those with existing Medicare Advantage plans concludes on March 31. 

Here is a quick guide to upcoming changes to Medicare Part D and Medicare Advantage.

Medicare Part D is the portion of Medicare that helps you pay for prescription drugs. According to Medicare.Gov, the three stages for most Medicare Advantage and Medicare drug plans are: 

1) Deductible Stage: Those who are under a Medicare plan with a deductible will pay out-of-pocket costs up to the $590 full deductible. 

2) Initial Coverage Stage: Then, eligible Medicare plan users will pay a 25% coinsurance cost toward name-brand and generic prescriptions. Currently, there is a $2,000 out-of-pocket maximum for covered Medicare Part D prescriptions. Various payments may also be eligible for the out-of-pocket maximum as well. 

3) Catastrophic Coverage: Once you have spent $2,000 on prescriptions, then Catastrophic Coverage kicks in. That means eligible Medicare users won't have to pay out-of-pocket for covered Part D prescriptions. 

It's important to note that only money spent on medications covered by your Medicare Part D plan counts toward your out-of-pocket limit. If you need medication that isn't covered, you could end up paying the full cost yourself. So, make sure to check which medications are covered under various Medicare plans. 

Currently in 2025, all Medicare plan members, including seniors using Medicare Part D, have the option to sign up for a medication payment plan.

Rather than paying the full cost of a prescription when you arrive at the pharmacy, you can choose to make smaller payments through bills from Medicare over the course of the calendar year instead.

This change can help ensure you get the medications you need when you need them and to spread out payments so they are more affordable.

Medicare Advantage — also known as Medicare Part C — is an alternative to original Medicare. If you choose Medicare Advantage, your insurance will come from a Medicare-approved health plan offered by a private insurance company that contracts with the government.

Depending on the provider, some Medicare Part C members may experience reduced flex card, OTC, or dental allowances in 2025. 

If you could face potentially greater insurance costs this year, then it's better to be prepared. 

Similarly, some Medicare Advantage insurance providers have stated that they are going to stop offering certain plans or offering coverage in specific states starting in 2025.

For instance, reports state that insurance provider Aetna will offer 10% fewer Medicare Part D with prescription drug coverage plans in 2025. Also, in late January 2025, Health Care Service Corporation confirmed acquisition of Cigna's Medicare businesses.

If your Medicare Advantage plan is disappearing, you will need to choose a different Medicare Advantage plan or switch over to Original Medicare.

You may be able to join Medicare Advantage, join a Medicare drug plan, or reevaluate your Medicare plan during various open enrollment periods: 

1) Initial Enrollment Period: When you first turn 65 or become eligible under the initial enrollment period. If you are a new enrollee, your enrollment period starts three months before your 65th birthday and ends three months after your 65 birthday.

2) Yearly Enrollment Periods: There are two yearly enrollment periods with varying caveats regarding what changes you can make to your plan during those times. The first is October 15-December 7, while Medicare Advantage's open enrollment period runs from January 1-March 31. 

3) Special Enrollment Period: If you've moved or lost coverage, you may still be able to receive coverage under the special enrollment period. Make sure to research if your specific situation is eligible. 

Whether you are enrolling in Medicare for the first time or considering switching plans, it pays to understand upcoming changes. 

Then, you can choose the best plan for your health as you prepare yourself financially for retirement.