Beginning in 2025, Medicare beneficiaries will pay no more than $2,000 out-of-pocket for prescription drugs covered under Part D, Medicare’s outpatient drug benefit. This is a significant reduction to the current maximum catastrophic exposure on Part D at $8,000.

For more information on these upcoming changes, view our summary document.

Here are the key things employers should know are coming, and they highlight the importance of ongoing Medicare education for employees.

• There are significant changes happening to Part D (Medicare Prescription Drug Coverage) beginning in 2025.
• These changes, effective Jan. 1, 2025, will reduce out-of-pocket costs for Medicare beneficiaries and eliminate the coverage gap -- or donut hole -- that exists after members and plans have paid a certain amount toward prescription drugs.
• This has been a particular concern for those on higher cost medications. Often, if they have been eligible for a group health plan, have chosen to stay there instead of moving to Medicare coverage. • Part D changes will also impact the credible coverage determination for employer-sponsored coverage. This calculation is anticipated to change beginning in 2026. The current standardized calculations are expected to remain the same for 2025.
• Employers need to ensure employees are receiving general education around Medicare, Part D changes and how credible coverage plays into potential Part D penalties for those over 65 still insured on a group plan.

Is your HR team interested in hosting a Medicare education session or exploring options on how to provide this great learning opportunity to your employees? Sanford Health Plan has a dedicated team available at no cost to our clients and will work with you to meet the needs of your employees.

Please reach out to your broker, Sanford Health Plan account executive or email sales@sanfordhealth.org for more information.