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# How is Medicare Part D Changing in 2025?
 /  / **How is Medicare Part D Changing in 2025?**
* Updated on November 14, 2024
* Written By: David Haass
* Reviewed By: Ashlee Zareczny
**Summary:** Projected Costs are now available for 2025 Medicare Part D plans. Plus, exciting changes in federal healthcare drug coverage are available that will change how you pay for high-cost prescription drugs. **Estimated Read Time: 4 min**
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The Centers for Medicare & Medicaid Services (CMS) recently announced important updates for Medicare beneficiaries. These updates include a projected decrease in the average monthly premium for Medicare Part D plans in 2025 and significant changes to the catastrophic coverage drug phase.
These developments will help provide beneficiaries with lower out-of-pocket costs and improved coverage options. Below, we discuss the details of these changes and their potential impact on you, the beneficiary.
## Projected: Medicare Part D Premiums Decrease in 2025
CMS’s announcement is exciting news for the millions of Medicare beneficiaries who rely on  benefits for prescription drug coverage each year. According to the latest projections, the average monthly premium for Medicare Part D in 2025 is anticipated to be $46.50. This is a 16% decrease from the 2024 average premium of $55.50.
The stability in premiums can be directly attributed to improvements made to the Part D program through the , such as , accountability for drug manufacturers, and overall reduced costs for Medicare beneficiaries. These improvements help ensure the Medicare Part D program remains accessible and affordable for all beneficiaries.
However, it is important to keep in mind that these numbers are only projections at this point and are subject to change. We will keep you up-to-date with the latest Medicare Part D premium news as soon as the official amounts are released.
## How Does CMS Determine the Average Projected Premium for Part D?
CMS’s decision to release the projected average Medicare Part D premium is an act of transparency from the federal healthcare program. This average premium is calculated based on plan bids submitted to CMS by Medicare Part D plan carriers and serves as a valuable tool for individuals to comprehend overall premium trends.
This transparency empowers beneficiaries to make informed decisions during the upcoming Annual Enrollment Period, where they can choose from a variety of plan options available in their area for the following calendar year.
Choosing the right Medicare Part D plan for your healthcare needs is just as important as choosing the right plan for your budget. Having these numbers available to you ahead of time allows you to better understand how a plans monthly premium fairs, among others.
## Changes to Medicare Part D Insulin Coverage in
Insulin is a necessary drug for millions of Americans, and extremely high costs deter enrollees from receiving their necessary prescription each month. In January, Medicare Part D plans are no longer able to apply the Medicare Part D deductible to any insulin product listed on the plan’s formulary or any vaccine recommended by the Advisory Committee on Immunization Practices.
Further, a Medicare Part D plan may not charge more than $35 for a month’s supply of insulin in the initial coverage phase or coverage gap phase. This cost decrease is a huge win for those previously unable to afford their prescription and makes receiving life-saving medication accessible for a wider range of Medicare enrollees.
## What is Catastrophic Coverage, and Where is it Going?
In addition to the premium decrease, the Medicare Part D program is set to undergo transformative changes in 2025, particularly in the catastrophic coverage phase. The  is known for its high out-of-pocket expenses for beneficiaries with significant drug costs. The changes in this phase are designed to alleviate financial burdens for Medicare Part D enrollees with high-cost medications.
Under the new structure, the catastrophic threshold for 2025 will be set at $2,000.00. This threshold includes out-of-pocket by the consumer, the amount spent by your insurance company, and manufacturer discounts on drugs during the coverage gap phase.
So, what does this mean for you? To put this change into perspective, an $2,000.00 cap in spending will result in substantial savings, potentially saving beneficiaries thousands of dollars. This saving will be evident to those who typically spend hundreds or thousands of dollars each month on prescription medications.
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## Changes to Medicare Part D Extra Help in 2025
In addition to the elimination of catastrophic coverage coinsurance and reduced insulin costs in 2024, Medicare Part D Low Income Subsidy or  is also seeing a revamp in requirements.
Extra Help allows low-income individuals to pay $0 premiums for Medicare Part D coverage and offers fixed copayments for prescription drugs.
This program will be expanded to those who fall between 135% and 150% of the federal poverty line and meet the predetermined resource limit requirements. In previous years, Extra Help was only available to those making less than 135% of the federal poverty limit.
## Medicare Part D 2025 Changes
There are more helpful changes in store for Medicare Part D beneficiaries in 2025. The Inflation Reduction Act will continue to help enrollees save money on prescription drug costs in 2025. The following changes include:
* There will be a cap on out-of-pocket drug costs. Out-of-pocket spending on Part D prescription drugs will be capped at $2,000.00 per year. This would not affect Medicare Part B drug costs.
* The coverage gap phase will be eliminated.
* Drug manufacturers and Medicare Part D plans will pay a larger share in catastrophic coverage costs while Medicare will pay a smaller share.
* Medicare Part D beneficiaries will have the option to spread out their out-of-pocket costs throughout the year instead of having high OOP costs in any given month.
## Preparing for Medicare Part D in 2025
The  for coverage beginning January 1, 2026, is scheduled from October 15 to December 7, 2025. Be sure to research your plan options and compare your coverage to ensure you make the most informed decision possible regarding your 2024 Medicare Part D coverage.
During the Annual Enrollment Period, our agents can help educate you on the plans in your area to fit your healthcare and financial needs. Complete our online rate form to work one on one with a licensed agent in your area.
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### Sources
MedicareFAQ is dedicated to providing you with authentic and trustworthy Medicare information. We have strict sourcing guidelines and work diligently to serve our readers with accurate and up-to-date content.
1. CMS Releases 2024 Projected Medicare Part D Premium and Bid Information, CMS. Accessed August 2023.
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Author!!
#### David Haass
 is the Chief Technology Officer and Co-Founder of Elite Insurance Partners and MedicareFAQ.com. He is a member and regular contributor to Forbes Finance Council and stay up-to-date with the latest Medicare trends and changes. He holds a Bachelor of Science in Business Administration and Management from the University of Florida.
Reviewer!!
#### Ashlee Zareczny
Director of OperationsAshlee Zareczny is the Director of Operations for MedicareFAQ. As a licensed Medicare agent in all 50 states, she is dedicated to educating those eligible for Medicare by providing the necessary resources and tools. Additionally, Ashlee trains new and tenured Medicare agents on CMS compliance guidelines. Ashlee is a Medicare expert who specializes in Medicare Supplement, Medicare Advantage, and Medicare Part D education.
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