For plan year 2025, the Inflation Reduction Act of 2022 makes a number of significant updates to the Part D benefit aimed at reducing enrollees’ out-of-pocket costs. The updates include capping enrollee out-of-pocket spending for covered Part D drugs at $2,000, eliminating enrollee cost-sharing in the Catastrophic Coverage stage, and eliminating the Coverage Gap.
Accordingly, in 2025 the Part D benefit will only have three stages instead of four:
· Yearly Deductible (Note: Some plans have a $0 deductible for prescription coverage.)
· Initial Coverage
· Catastrophic Coverage
To determine when a member moves from one stage to the next, the plan keeps track of the member’s TrOOP (True Out-of-Pocket) costs. Any money spent during the Deductible and Initial Coverage stages counts toward TrOOP costs. The monthly premium does not count toward TrOOP costs. Because enrollees’ out-of-pocket costs for covered Part D drugs will be capped at $2,000 in 2025, enrollees will reach the Catastrophic Coverage stage sooner, at which point they will have $0 cost-sharing for covered Part D drugs.