3 Big Medicare Prescription Drug Changes Coming in 2025

2. The coverage gap — or “donut hole” — will finally close

The original Medicare Part D benefit had a coverage gap (also called the "donut hole") where enrollees were responsible for 100 percent of their prescription drug costs. This cost-sharing amount was eventually lowered to 25 percent. Even still, many enrollees who reached the coverage gap faced higher out-of-pocket costs while they were in that part of the benefit.

In 2024, Part D enrollees entered the coverage gap after their total prescription drug spending reached $5,030. Once they hit that amount, they were responsible for up to 25 percent of the cost of their medication until their out-of-pocket expenses reached $8,000 and pushed them into catastrophic coverage.  

The prescription drug law that created the new $2,000 out-of-pocket spending cap also eliminates the coverage gap, simplifying coverage for enrollees. Beginning Jan. 1, a person will have the same cost-sharing from the time they meet their Part D plan deductible until they reach the new $2,000 out-of-pocket cap, at which point, they’ll be off the hook for any additional out-of-pocket expenses for their covered prescription drugs for the remainder of the calendar year. 

3. You can spread your drug costs throughout the year

In an effort to bring some relief to people on high-priced medications — especially those who might hit the new $2,000 limit in the first few months of the year — Part D enrollees will have the option to enroll in a new payment program that spreads their out-of-pocket expenses throughout the year, instead of potentially paying them all at once.

For example, someone who takes a prescription drug that costs $5,000 a month would pay $2,000 in January and nothing else for the remainder of the year. But coming up with $2,000 all at once can be difficult, so this program would allow you to pay it in monthly installments.

Meena Seshamani, M.D., who directs the Center for Medicare, told AARP that this payment plan isn’t for everyone. For example, it doesn’t make much sense for someone with low or manageable monthly medication expenses. It’s also less beneficial to people who sign up for the plan later in the year, when there are fewer months to spread out the payments. 

If you enroll in the payment program — and you can enroll any time throughout the year — you’ll receive a monthly bill for your medications from your drug plan. This bill will be separate from the monthly bill for your plan premium, if you have one.

Just know that the payment plan won’t save you money on your prescription expenses, but it will help ease the burden of paying a large lump sum up front at the pharmacy counter.  

More prescription drug savings are coming in 2026

There are a few other changes to prescription drug plans on the horizon. In 2024, Medicare negotiated for the first time the prices of 10 of the most commonly used and expensive prescription drugs. The lower prices take effect in 2026 and are expected to save people enrolled in Medicare an estimated $1.5 billion in out-of-pocket costs in 2026 alone.

The first 10 drugs with negotiated prices include:

• Eliquis (blood thinner)
• Jardiance (diabetes, heart failure, chronic kidney disease)
• Xarelto (blood thinner)
• Januvia (diabetes)
• Farxiga (diabetes, heart failure, chronic kidney disease)
• Entresto (heart failure)
• Enbrel (rheumatoid arthritis, psoriasis, psoriatic arthritis)
• Imbruvica (blood cancers)
• Stelara (psoriasis, psoriatic arthritis, Crohn's disease, ulcerative colitis)
• NovoLog/Fiasp, several pens (diabetes)

In 2025, Medicare will select an additional 15 drugs covered under Part D to negotiate prices that will become available in 2027, and more medications will be negotiated each year beyond that.