UNITED STATES, — The start of 2025 marks the start of the capping of prescription drug costs for Medicare Part D recipients.
Beginning Jan. 1, out-of-pocket costs of prescription drugs will be capped at $2,000 for the year, with the number indexing in the future based on increases in Part D costs.
In prior years, Part D saw a coverage gap known as a “donut hole,” which forced recipients to pay out-of-pocket costs after an initial coverage threshold was reached.
The costs would be paid out-of-pocket until a “catastrophic” threshold was reached. In 2024, that threshold was $8,000. This threshold is now eliminated.
Also beginning in 2025, out-of-pocket costs can be paid in installments over the course of the year, rather than being paid at once at the pharmacy.
The change comes as a result of the Inflation Reduction Act, which was signed by President Biden in 2022.
That law also allowed for the price of insulin to be capped at $35, which took effect in 2023.
According to AARP, more than three million Americans are expected to save on prescription drug costs as a result of the cap.