The Centers for Medicare & Medicaid Services (CMS) is making changes to Medicare Part D prescription drug coverage starting in 2025, which means your coverage may be changing. Now is the time to review your Medicare coverage options to make sure you have the best plan for your needs. And, if you don’t have a Medicare Advantage plan, you may want to consider making the switch.

What you need to know about Medicare Part D There are a lot of factors to keep in mind when looking over Medicare plans, and with the changes to Medicare Part D, a lot of questions can arise that are difficult to sort through.

Here are answers to some of the most commonly asked questions about Medicare Part D. If you need more help, make sure you reach out to a trusted Medicare Advantage Plan agent for more information about your coverage options.

What is Medicare Part D?

Medicare Part D is a federal program that provides prescription drug coverage for Medicare members. It is available through private insurance companies approved by Medicare.

What does Medicare Part D cover?

Medicare Part D coverage has a structured system in place that determines which drugs are covered and at what cost. When it comes to Medicare Part D, the three most important terms you need to know about are formulary, tiers and pharmacy network.

Formulary: Each Part D plan has a formulary, which is a list of covered drugs. It includes a wide range of prescription medications categorized into different tiers.

Tiers: Each tier has a different cost-sharing amount for medications. Lower tier drugs usually have lower copayments or coinsurance.

Pharmacy network: Part D plans have a network of pharmacies where members can fill their prescriptions. It is important to choose a plan with pharmacies that are convenient for you.

Not all plans have the same formularies, tiers and pharmacy networks in place, so it’s important to pick a plan that covers all your needs.

What changes are coming to Medicare Part D in 2025?

Three important changes will be made:

1. Annual out-of-pocket costs for Medicare Part D will be capped at $2,000.
2. Medicare prescription drug plans must offer the option for members to pay out-of-pocket costs in monthly installments instead of all at once at the pharmacy.
3. The Inflation Reduction Act requires CMS to establish a Part D manufacturer discount program, replacing the Coverage Gap Discount Program. This eliminates the Coverage Gap stage, commonly known as the “Donut Hole,” in Medicare Part D plans.

Who will be affected by the changes?

Most people enrolled in Medicare will be affected by the changes made to Medicare Part D. Checking with your Medicare plan provider is a good way to find out what will change for you.

Where can I learn more about the changes to Medicare and my plan options?

Whether you’re new to Medicare or exploring your options, we understand your desire for a plan that comes with benefits and support tailored to you and your health goals. Align powered by Sanford Health Plan offers free resources to help you learn about your Medicare options, including a prescription coverage guide.

We also offer Medicare Advantage plans that include Medicare Parts A & B, prescription coverage and extra benefits. Plus, you’ll receive care from a network of providers you know and trust.

Benefits include:

• $0 premium and copay options
• Quarterly allowance for over-the-counter products like cold medicine
• $2,000 annual allowance for dental, hearing and vision expenses 
• Prescription drug coverage
• Health navigator services
• Easy access to behavioral health services
• Fitness incentives

To download our free prescription coverage guide or learn more about prescription coverage changes, click here.

Align powered by Sanford Health Plan is a PPO with a Medicare contract. Enrollment in Align powered by Sanford Health Plan depends on contract renewal. Sanford Health Plan complies with applicable federal civil rights laws and does not discriminate on the basis of race, color, national origin, age, disability or sex.