Medicare prescription drug plans in 2025
Prescription drug coverage is not included in original Medicare, but is optionally available to beneficiaries in one of two ways; as a separate Part D PDP (Prescription Drug Plan), or included in some Medicare Advantage Plans (MA-PD). Both options are available to anyone on Medicare for 2025, regardless of past or existing health issues. The number of available plans varies for each region, so depending on where you live, you may have an overwhelming choice.
Medicare prescription drug plans available for 2025
Medicare Part D Plans (PDP)
Part D ‘stand-alone’ insurance helps with coverage of prescription drugs. Anybody who has original Medicare, or is enrolled in a Medicare supplemental insurance (Medigap), or is enrolled in a Medicare advantage plan without prescription drug benefits may opt to enroll.
Although Part D plans are offered by private insurance companies, they must provide standard coverage per federal regulations, especially regarding the so called ‘donut hole’. Many plans include additional benefits. Each plan has different ‘formularies’ (the drugs that are covered) and costs, and many limit the pharmacies you will be able to use.
Prescription drug coverage included in a Medicare advantage plan (MA-PD)
Seniors who opt to add additional coverage to their original Medicare by means of a Medicare advantage plan, may, depending on availability, select a policy that includes prescription drugs. While some insurers include drug benefits in the monthly advantage plan premium, others give you the option to add them at an additional premium. As most Medicare advantage plans are HMO or PPO, you will typically have a restricted formulary, and a network of pharmacies that must be used.
Costs of Medicare prescription drug plans in 2025
Medicare prescription drug plans typically use formularies (a list of covered drugs) and tiers (the cost-sharing between insurer and beneficiary). Typically, you will have a monthly premium, plus out-of-pocket expenses (co-payments, co-insurance and deductibles), which depend on several factors, mainly your medication, where you purchase it, and how much your plan covers. Depending on your personal situation, you may also have a late enrollment penalty or extra help, which may lower or raise your monthly premium. Coverage and costs vary widely among plan policies, so you should compare different options before you select a plan. You can find details about Medicare Part D prescription drug plans in 2025 at the official Medicare.gov website here.
New starting 2025: Out-of-pocket cap and prescription payment plan option
From 2025 on, Medicare Part D beneficiaries will have to spend a maximum of $2,000 out-of-pocket for their prescription drugs. There will not be a coverage gap (formerly known as the Donut Hole) anymore.
There is also a new option to help you manage your out-of-pocket costs for prescription medication: You may now spread them across the year (January–December). For more information, go to https://www.medicare.gov/prescription-payment-plan.
Enrollment and late enrollment penalty for Medicare prescription drug plans
You may add prescription drug coverage to your Medicare or switch plans only during specific times: when you first become eligible for Medicare, or each year during the ‘annual open enrollment period’ in fall. Although enrollment is optional, you may face a late enrollment penalty if you are 63+ days in a row without creditable prescription drug coverage (except under specific circumstances).
Extra Help
Persons with low income may qualify for the Extra Help program, which helps with premiums, deductibles and co-payments of a Part D plan. Call the Social Security Administration at (800) 772-1213 for details.
Being covered for prescription medication is important, especially when you get older. However, no prescription drug plan is ‘best’, and not all plans are for everybody. No plan is ‘all-inclusive’ – it will only help you lower the costs for specific prescription drugs to a certain degree, as defined in your insurance policy.
