Kimberly Rankford, Kipplinger’s personal finances
The cost of prescription drugs has risen significantly over the past few years. According to the latest data available from the US Department of Health and Human Services, among the drugs that rose in price from January 2022 to January 2023, the average increase was 15.2%, compared to 11.5% the previous year. A Commonwealth Fund survey found that 14% of Medicare beneficiaries did not fill their prescriptions or administer their medication because of costs. “Not being able to buy the prescriptions you need can have long-term impacts on your health outcomes,” says Gretchen Jacobson, vice president of Medicare at the Commonwealth Foundation.
However, the past few years have brought about changes that make prescription drugs more affordable for many people with Medicare Part D or Medicare Advantage plans. The Inflation Reduction Act of 2022 limits co-payments for covered insulin to $35 a month, eliminates cost sharing for adult vaccines covered in Part D, expands additional help programs (supporting low-income Medicare beneficiaries in insurance and co-payments, and launches negotiations with drug companies with the government. The scary “doughnut hole” initially required beneficiaries to pay 100% of the drug costs after reaching a certain level, but it has disappeared. Instead, out-of-pocket costs for eligible drugs have been kept at $2,000 a year since 2025.
“Now it’s much easier to navigate and predict Part D costs,” says Cait Lindnovan, senior director of the Patient Advocate Foundation, a nonprofit that provides free case management and financial support to people diagnosed with serious medical conditions.
But you may still encounter surprises. Only drugs eligible for the plan’s prescription are covered by CAP, and the plan changes the list of target drugs. Drug Plans also adds coverage restrictions, including advance approval and step therapy. Also, some of the costs you have to pay before you reach the cap. The maximum deduction for the Part D plan increased to $590 in 2025. You may need to pay a higher percentage of drug costs, especially after you reach the specialist drug deduction. Premiums not included in the cap also increased in many Part D plans in 2025.
So it’s still important to do some kind of work to save money on prescription drugs. However, due to these changes, the strategy is different from the past. This is what you need to know.
Make the most of your $2,000 cap
The $2,000 out-of-pocket cap is a game changer for people with high drug costs. HHS predicts that approximately 11.3 million part-D subscribers will meet CAP in 2025. From that point onwards, you will not have to pay anything for the drugs covered. However, the new rules have some limitations, says Juliette Cubanski, assistant director of the KFF’s Medicare program. Importantly, the $2,000 cap applies only if you are using the plan and only for drugs the plan covers, she says.
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It changes some cost-cutting strategies. For example, if in the past your Part D has requested a high co-payment for your medication, searching for sites like coupons such as GoodRX.com makes sense to search for coupons that can cost less drugs than insurance co-payments. In that case, you can save money by using cash with coupons rather than insurance. However, the formula is different from the new cap. Currently, if drug costs are expected to approach the $2,000 annual threshold, you can pay to use your insurance, whether your insurance co-payments are slightly higher or if the costs can be counted to the cap.
“We’re committed to providing a great opportunity to help you,” said Cindy George, Senior Personal Finance Editor at GoodRx. “Is it better to stick to the plan, praise the out-of-pocket costs and reach the point where you pay 100% for your medication?”
Take advantage of the smoothing program. The $2,000 cap is helpful, but beneficiaries may have difficulty paying for out-of-pocket medication if they need to cover everything at once. For example, people with cancer often have a lot of prescription drugs and other costs, and could hit CAP in January, says Robin Yablov, vice-president of science at the American Cancer Society.
Uncovered drug strategies
The $2,000 cap applies only to drugs included in the plan formula, so it’s essential to check if the drug is covered when choosing a plan, Cubanski says. She says plans often change formulas, so plans can lose coverage of once covered drugs.
If your medication is not covered, you may lose other benefits. For example, the Inflation Reduction Act limits the cost of insulin to $35 per month, but only insulin covered by Part D or Medicare Advantage plans. Not all plans cover all types of insulin and plans coverage may change, so it’s important to review the formula before choosing a plan, says Diane Omdahl, co-founder of 65 Incorporated, a company that supports Medicare decisions.
Prescribing new medications that are not included in the plan’s formulary can be challenging. Before leaving the doctor’s office, Omdahl recommends using the Medicare plan finder to check the coverage of your plan. If your insurance doesn’t cover your drugs, or if you have a high co-payment, ask your doctor or medication prescribe if there are other medications that can meet your similar needs, such as low-cost generics or therapeutic alternatives that cost less under your plan. Professionals who prescribe expensive medications generally have the resources to help patients navigate costs.
For cancer patients, for example, “I recommend talking to the oncocare team about other options,” says Yabroff. “If people can’t afford a particular treatment, there may be alternatives to equally effective but inexpensive recommended treatments.”
Your pharmacist may also be able to help. “Patients can always ask their pharmacist for a savings review,” says Monica Prinzing, CVS health spokesman. “CVS pharmacists can review patients’ prescribing regimens and help patients work with their physicians to determine potential alternatives.”
©2025 The Kiplinger Washington Editors, Inc. was distributed by the Tribune Content Agency, LLC.
The views and opinions expressed are those of the author. They are for general informational purposes only and should not be interpreted or interpreted as recommendations or solicitations. Epoch Times does not provide investments, taxes, legal, financial planning, real estate planning, or other personal financial advice. Epoch Times is not responsible for the accuracy or timeliness of the information provided.
