Changes coming to your Medicare Part D coverage: Inflation Reduction Act Frequently Asked Questions
Published by Medicare Made Clear®
UnitedHealthcare wants to provide you with reliable information to help you navigate the new prescription drug coverage changes that are impacting the Medicare industry in 2025. We’re committed to making your Medicare experience as seamless as possible. Read the following article to help answer questions you may have on the changes.
What is the Inflation Reduction Act (IRA) and why does it matter?
The Inflation Reduction Act (IRA) was signed into law in 2022 and includes several changes that impact UnitedHealthcare members with Medicare prescription drug (Part D) coverage. These changes affect all Medicare members with Part D coverage, regardless of insurance carrier.
What are the big changes coming in 2025 out of the IRA?
- No more “donut hole”
- Lower maximum out-of-pocket drug costs
- New Medicare Prescription Payment Plan
Elimination of Coverage Gap
The coverage stage cycle starts over at the beginning of each plan year, usually January 1st.
The Coverage Gap stage, or “donut hole,” is going away in 2025. You will now have 3 drug payment stages as part of your Part D benefit: Deductible, Initial Coverage, and Catastrophic Coverage. The Gap Phase (also known as the donut hole) is being removed in 2025.
During the year, you may go through different drug coverage stages. There are three stages (deductible, initial and catastrophic), and it’s important to understand how each impacts your prescription drug costs. You may not go through all the stages.
Deductible stage
If your plan has a prescription drug deductible, you pay the full cost for your drugs until you reach your deductible amount. Then you move to the Initial Coverage stage.
Initial stage
In this stage, you pay your copays or coinsurance and the plan pays the rest of the cost of the Medicare-covered prescription drug. Once you, and others on your behalf, have paid a combined total of $2,000 – including any amount paid toward a deductible – you move to the Catastrophic Coverage stage.
Catastrophic coverage stage
Like in 2024, you won’t pay anything for Medicare-covered Part D drugs for the rest of the plan year in this stage. If your plan includes additional prescription drug coverage, you may need to continue to pay a cost-share for those drugs.
New Maximum OOP
The 2025 annual out-of-pocket maximum amount for Medicare-covered Part D drugs is $2,000. This is a decrease from 2024, when the out-of-pocket maximum was $8,000.
Any amounts you’ve paid toward your annual deductible, as well as any copays or coinsurance amounts you’ve paid for your Medicare-covered prescription drugs.
Additionally, payments made by your plan or third party organizations like Extra Help, Indian Health Service (IHS), charities, or qualified state pharmaceutical assistance programs (SPAPs) may also count. For more information, please refer to your plan documents.
Your Explanation of Benefits (EOB) will include a breakdown of what payments count towards your out-of-pocket maximum amount.
Medicare Prescription Payment Plan
Medicare members with Part D coverage can spread their prescription drug out-of-pocket costs into monthly payments over the course of the plan year.
The program might be a good fit for you if you have high covered Part D drug costs, will hit the $2,000 annual out-ofpocket maximum amount before September and want to spread your covered Part D drug costs throughout the rest of the year.
The Medicare Prescription Payment Plan might not be a good fit for you if:
- Your yearly covered Part D drug costs are low and about the same each month
- You’re not likely to reach the $2,000 annual out-of-pocket maximum
- You qualify for Extra Help or another government program to help save on your covered Part D prescription drug costs
If you opt into the program, you will no longer pay the pharmacy when you fill your covered Part D prescriptions. Instead, your plan will pay and send you a monthly bill.
Costs are billed by the member’s/your insurer.
No. Participation in the Medicare Prescription Payment Plan is not required and may not be a good fit for everyone.
I’m still confused about the changes to Part D. Who can I ask for more information?
If you have any further questions, view more about the Inflation Reduction Act Medicare Part D changes.
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