By Trish Pearson
Insuring Your Future
Trish Pearson
There are major changes coming in prescription drug costs for Medicare recipients in 2025 – and it’s all good news.
The Center for Medicare Services has revised the rules regarding the maximum out-of-pocket costs as well as the pricing for several name-brand medications. These changes are because of negotiations by the Biden administration and the CMS. CMS has also negotiated deep discounts off the list price for 10 drugs that are very costly. These changes will bring much needed financial relief to people who take drugs that put them in the “donut hole” when they reach the initial cost of medication maximum each year (currently $5,000).
The out-of-pocket maximum, which is the most a person can be expected to pay for their prescription medications annually, will be $2,000. That is down from the current annual maximum of $8,000. The cost for medications in the initial stage will be 25 percent as opposed to a flat copay based on the tier.
For people taking generic medications, the cost difference will be minimal. However, name-brand medications that are classified as tier 3 could exceed the $45 average copay in the initial stage. To reduce the sticker shock, insurance carriers will offer a payment plan that will allow people to finance the cost of the medications over a 12-month period. In other words, they will spread the $2,000 maximum copay over equal payments for the year.
The second major change which was announced is that Medicare has set prices for 10 drugs which currently are very expensive, some exceeding $1,000 per month. Some of the drugs on the list include Eliquis, Xarelto and Jardiance. These three drugs are responsible for many people reaching the total cost maximum and landing in the “donut hole” halfway through the year. Altogether, the 10 drugs, which treat a variety of conditions including cancers and clotting, accounted for $50.5 billion in spending from June 1, 2022 to May 31, 2023, for people on Medicare Part D, either through standalone drug plans or Medicare Advantage plans.
It remains to be seen how much these drugs will cost the consumer, but it will make a dramatic difference in their monthly spending on prescription medications. Jardiance will go from a list price of $527 per month to $113 and Xarelto will go from $517 to $197 per month. There will be additional subsidies through insurance coverage, thereby reducing the price at the counter even more.
More details will be forthcoming in October when the annual enrollment period begins. Unlike other years when there are very few changes, this year it is worth taking the time to attend the informational seminars that will be offered at community centers and other locations in Milford and Orange. In the meantime, enjoy these last warm, hazy days of summer.
Trish Pearson is a licensed independent insurance agent and certified long term care specialist. Contact her at 203-640-5969 or trishpearson281@gmail.com.