It’s Time To Check Out Your 2025 Part D Drug Coverage

The annual Open Enrollment Period ends December 7, just 30 days from now. Traditionally, fewer than 30% of drug plan enrollees pay attention to how their coverage will change in the new year. They’re happy with the plan and it’s just too much hassle.

However, this year is not just any ordinary year. The Inflation Reduction Act is changing so many things. It’s as though Part D coverage has been put into a blender and we have to figure out the new concoctions.

10 Important Points about 2024 Open Enrollment

For the last month, I have been very busy, reviewing the drug coverage for many clients. This list can have an impact on your drug coverage in 2025 and shows why this open enrollment is so important.

1. Your plan may not be available next year.

KFF reported that there will be 26% fewer plans available in 2025. On average, that means about six plans in each area.

This is one of the most significant, and possibly costly, changes. If your plan is being discontinued, the insurer will enroll you in another plan automatically, unless you make a change. My friend now knows this. Her zero-premium drug plan is going away, and she would be assigned to one with a $45 monthly premium.

2. Premiums in 2025 will be all over the map.

A review of 46 plans in three ZIP codes shows a crazy variation in premium changes.

3. Long-term drugs may no longer be in your plan’s formulary.

Plans dropping drugs from the list of covered medications is not new but this year, it seems to be a bit different. I am finding more situations in which drugs that clients have been on for years won’t be covered next year. They are scrambling to find a different medication to treat their chronic conditions.

4. The quality of Part D drug plans has decreased significantly.

According to CMS, about 5% of drug plan enrollees will be in a plan with 4 or more stars, compared to almost 42% in 2022. Even more concerning, there were 10 5-star and no 2-star plans in 2022 and, next year, those numbers flip – two 5-star and nine 2-star. (Medicare Advantage plans’ star ratings have also declined.)

5. Tier 6 has disappeared.

For a few years now, some plans have included Tier 6, select care medications, which is limited to select generic medications for blood pressure, cholesterol and diabetes. The costs were significantly lower; in many cases, there was no copayment. Most interesting was the fact that a few plans classified Jardiance and Ozempic as Tier 6 with an $11 copayment.

It appears that Tier 6 is gone, with those drugs moved into other tiers. The Tier 6, $11 copayment, is now a Tier 3 with a 17%-25% coinsurance. Talk about sticker shock.

6. Tier 3, preferred brand, drugs will cost more.

This happens when a plan replaces a copayment with a coinsurance, such as $47 becomes 17%, or increases the percentage, 15% to 18%. This is happening in almost 40% of the plans in a Los Angeles ZIP code.

7. Tier 4 in some plans will be a coinsurance, instead of a copayment.

During my review of drug plans last year, I found that higher premiums, like $107 or $115, generally went with copayments of $45 or $47 for Tier 4, nonpreferred brand.

Things are changing for 2025. Although not an exhaustive review, I noted a few plans changing to a coinsurance. One example, a 2024 plan with a $101 premium and $40 Tier 4 copayment will now have a $167 premium and 25% Tier 4 coinsurance in 2025. Enrollees will pay more in premiums to pay more for their medications.

8. The difference in cost sharing between standard and preferred pharmacies can be dramatic.

You have to pay close attention to how much you’ll pay at each pharmacy. Preferred pharmacies are not always the lowest cost. However, this year, I have seen significant differences in cost sharing between standard and preferred in some plans.

A client takes six Tier 2 and four Tier 1 drugs, all cheap generics or so he thought. At his go-to pharmacy (standard), the annual costs would be $1,560 and, at a pharmacy considerably further from his home (preferred), zero. That’s because, in this plan, Tier 1 and Tier 2 drugs at a preferred pharmacy have no copayment but, at a standard pharmacy, the cost will be $10 and $15 respectively.

9. Grocery store pharmacies continue to offer competitive pricing.

Most Medicare beneficiaries grew up during a time when they got milk and bread at the grocery store and pills from the corner drug store. Things certainly have changed. A recent client’s drug costs could drop from $670 to $60 if he changed to the pharmacy in his grocery store.

10. Estimated costs in the Medicare Plan Finder can change overnight.

I started a review Monday afternoon and finished it on Tuesday morning, only to find the “total + premium cost” had changed (increased). There isn’t anything to do about that, except realize that estimated costs are only a way to compare plans, not give you the data for a detailed budget. If costs go up for one plan, they probably will go up for all.

Facts of Part D Life for 2025

• Your current plan may not be around.
• If it is, prepare to pay more.
• If changing plans, do not expect to find a 4- or a 5-star plan.
• The best pharmacies may not be the most convenient.
• Your costs can be unpredictable and likely will change.

Excuse the broken record but now is the time to evaluate your drug coverage and make a change if you find something better. Those who snooze will definitely lose.