Medicare Part D is going to look a little different in 2025. Due to factors like the Inflation Reduction Act and the Medicare Drug Price Negotiation Program, Part D plans and associated costs are changing across the board. 

Here’s a breakdown of what those Part D changes look like for the year ahead — and what they might mean for you. 

Changes to Medicare Part D plans in 2025

The number of Part D plans offered fell from 709 in 2024 to 524 in 2025 — marking an over 25% decrease. Still, beneficiaries nationwide can choose from at least a dozen stand-alone plans, with actual numbers ranging from 12 to 18 plans, depending on your state. 

While Prescription Drug Plan numbers are trending downward, locally available Medicare Advantage plans have increased over the past few years, and many people are getting Part D coverage this way. 

How the Low-Income Subsidy is changing in 2025

The Part D Low-Income Subsidy (LIS) program, also known as Extra Help, is a program that helps cover the cost of prescription drugs for people with Medicare — including Medicare Part D and its premiums, deductibles, and copayments. You might qualify for Extra Help if:

• You live in the United States
• Your annual income is below $22,590 for an individual or $30,660 for a married couple. (Income limits are higher in Alaska and Hawaii.)
• Your resources are below $17,220 for an individual or $34,360 for a married couple.
  • Resources include money in a checking, savings, or retirement account, stocks, and bonds, but not a home, car, and other personal items. 

Some people qualify for LIS automatically, while others can apply through Social Security. 

In 2025, there will be a 5% reduction on available LIS plans with no premium (also called “benchmark” plans) to 120 plans total, varying from two to six plans across the United States. This is a slight drop, but LIS beneficiaries will still have a variety of low-cost plans to choose from. 

Medicare Part D premium and cost changes in 2025

A few key changes are coming to Medicare Part D premiums and costs in 2025. Here are the highlights:

• Base Premium: Think of this as a starting price for your Prescription Drug Plan. In 2025, base premiums are increasing, but due to the Inflation Reduction Act, this annual growth is capped at 6%, totaling $36.78. Keep in mind, the base premium is just a part of what you’ll pay. Your total monthly premium could be higher or lower, depending on your plan’s insurer.
• Deductible: This is the amount you pay for drugs before your plan starts helping. For the standard Part D benefit, enrollees will pay a little more this year at $590, up from $545 in 2024.
• Out-of-pocket costs: After you meet your deductible, you’ll pay 25% of your prescription costs until you hit $2,000, which is the new out-of-pocket spending cap — down from $3,500 in 2024. Once you’ve hit that amount, you’ll qualify for catastrophic coverage and typically pay no additional out-of-pocket costs for your medication.
• Prescription Drug Prices: As a result of the Medicare Drug Price Negotiation Program, there will be lower prices for ten commonly used and costly medications for chronic conditions in 2026. These conditions include diabetes, heart disease, blood clots, psoriasis, and certain cancers. The Inflation Reducation Act also capped the price of insulin products to no more than $35 per month in all Part D plans. 

What Medicare Part D changes mean for beneficiaries

In summary, Medicare Part D is getting a bit more expensive in 2025, but limits on base premiums and out-of-pocket spending may help alleviate some of the burden. Remember, your actual costs will depend on your specific plan, so it’s always a good idea to shop around and compare plans to find the best deal for you.

Here’s what you can keep an eye on as these changes take effect:

• Take note of any premium changes in your annual notice of change (ANOC) or if your plan is no longer available.
• Check for any changes in your medication prices or coverage by reviewing your insurance provider’s list of covered prescriptions, also known as a formulary.
• If your costs have changed significantly enough, you may want to consider a change to your Part D coverage.

If you need help navigating your Medicare Part D coverage or have any questions about the upcoming Prescription Drug Plan changes, reach out to SmartMatch. Our team of licensed insurance agents can explain the updates in greater detail and help you understand how it might impact your coverage.