O’FALLON, Mo. – For the first time in the history of the Medicare program, out-of-pocket prescription drug costs will be capped. Changes to Medicare Advantage plans or standalone Part D plans begin Jan. 1, 2025.
“The donut hole, not the good kind of donut hole. It’s going away next year,” Paige Lombardo, co-owner of Health Matters Insurance in O’Fallon, Missouri, said.
The donut hole she’s referring to is Medicare’s annual gap in prescription drug coverage. Beginning Jan. 1, millions of Americans will pay no more than $2,000 for prescription drugs.
It’s a change that could save some people thousands of dollars.
“People could be surprised. They might have a deductible for the first time that they didn’t have previously. The first time they go to the pharmacy in January, they could be a little sticker shocked with how much their deductible or their copays are, but it is nice as a prescription payment plan that’s coming out so they could spread out that cost to 12 months for the year,” Lombardo said.
Leigh Purvis with AARP estimates the new out-of-pocket cap could help more than 4 million people save money by 2029.
“On average, about 40 percent are going to see savings of $1,000 or more when they hit that cap. So really, some significant savings for people who are often on fixed incomes,” Purvis said.
Paige Lombardo says it’s important to read the Annual Notice of Change (ANOC) you’ll receive in the mail.
“That’ll detail everything that’ll change about your plan to some of those copays. For example, maybe you have to go get some MRI’s this year. It could have been $70 copay last year. Now it might be 20 percent coinsurance. It’s important to look at those details, depending on what kind of things are happening, health-wise, for next year,” Lombardo added.
Signing up for Medicare can be overwhelming, especially for first timers. Lombardo recommends using the free services provided by her company or others like it to make sure you’re on the right track.
“It’s so important to really understand what you’re enrolling in; instead of getting a one-sided opinion over the phone or maybe a friend, family member, or neighbor, you really need the full story of Medicare and to know all of your options before you make a decision,” Lombardo said.
Medicare open enrollment runs from Oct. 15 to Dec. 7.
