The Medicare open enrollment period is now. From October 15 to December 7, retirees have the opportunity to make changes to their Medicare plan to ensure their health care needs are met.

Generally, retirees – like everyone else – benefit just one chance per year to make changes to their Medicare coverage, so it is critical that seniors are informed consumers during this time, especially when changes occur.

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For next year, most of the big changes revolve around Medicare Part D, which deals with prescription drug coverage. If you’re currently enrolled in Medicare Part D, you should pay attention to these new rules – and you should also take note if you have a Medicare Advantage plan, as these plans may also provide prescription drug coverage.

Here’s what you need to know.

There is a new cap on Part D coverage

The first and most important thing to know is that there is a new cap on out-of-pocket costs for prescription drug coverage under Medicare Part D. This cap was introduced as part of the Reduction Act of inflation.

Part D will now offer three levels of coverage, eliminating the complex payment structure that existed before the change. Here’s how it will work.

• You’ll have a deductible, capped at $590 per year, that you’ll have to pay out of pocket before Part D starts covering prescriptions.

• During your initial coverage phase, you will pay 25% of the overall drug cost.

• Once you reach a spending limit of $2,000 paying for covered drugs, you will no longer have to pay.

Some plans offer better coverage, including offering lower deductibles, but all Part D plans must now be at least as generous.

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Medicare Part D premium prices could rise

With the new drug spending cap, lawmakers were concerned that insurers could raise premiums for stand-alone prescription drug plans. To prevent this from happening in 2025, the Biden administration instituted a program subsidizing these plans.

Unfortunately, insurers are still allowed to increase their rates in 2025, although the increase is capped at $35 per month. However, this can add up to a substantial amount of money in additional premiums.

If you currently have a stand-alone plan, find out if your premiums are increasing. If so, consider shopping around to see if there are better deals.

A Medicare prescription payment plan option is available

Finally, the introduction of a Medicare prescription payment plan is another major change that could have a positive impact for seniors who difficulty budgeting for expensive medications.

This option allows seniors to spread their planned expenses throughout the year. Instead of paying all at once, they can pay for their medications over time. If you’re on a fixed income, this may be more affordable than having to pay thousands of dollars all at once when filling expensive prescriptions.

It is important for older Americans to be aware of these changes as they enter the open enrollment period so they can carefully explore their options for prescription drug coverage to make the best choice.

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This article provides information only and should not be considered advice. It is provided without warranty of any kind.