Medicare Part D is Changing in 2024. Here’s What Seniors Need to Know

medicare part d changes


If you have Medicare Part D for prescription drug coverage, you can look forward to significant changes in 2024. As challenging as understanding any changes to Medicare can be, the Part D update is worth learning more about.

You may not have realized, but the Inflation Reduction Act of 2022 included provisions to control the cost of your prescription drugs. Specifically, the Act caps Part D participants’ out-of-pocket prescription costs, requiring Medicare and drug manufacturers to shoulder more of the financial burden.

Change isn’t always good, but these are welcome news! In 2024, the result will be that most seniors will save money on their Medicare Part D coverage. Here’s what you need to know about the upcoming Part D changes and how they might benefit you.

Recap of current Medicare Part D benefits

Before we detail all the changes, understanding how Medicare Part D currently works is helpful. Overall, Medicare Part D has four phases. The amount you, Part D plans, drug manufacturers, and Medicare contribute varies in each phase. Here’s a quick overview of Part D in 2023:

  • Deductible phase: You cover the entire drug cost up to $505.
  • Initial coverage phase: After meeting your deductible, Part D covers 75% of drug costs. You pay the remaining 25%—up to $44,660.
  • Coverage gap phase: Also known as the donut hole, in the coverage gap phase, you pay 25% of drug costs, with a few exceptions. Part D covers 75% of an off-brand drug cost and 5% of a name-brand drug cost. Manufacturers give you a 70% discount on name-brand drugs to take care of the remaining balance.
  • Catastrophic phase: When your out-of-pocket cost plus the manufacturer’s discount reaches $7,400, Medicare will pay 80% of your drug costs, Part D will pay 15%, and you pay just 5%.

These phases are well-established parts of Medicare Part D. But in 2024, many of their requirements and thresholds will change to make prescription drugs more affordable for seniors.

Changes to Part D in 2024

Beginning in 2024, Part D plan changes will cap the amount you spend on prescription drugs. Part D plans will support you by increasing the catastrophic phase contribution from 15% to 20%. These changes mean you’ll no longer have to pay the remaining 5% for your prescription drugs.

Of course, there’s a catch. The catastrophic phase threshold, which was $7,400 in 2023 will increase to $8,000 in 2024. Regardless, if your prescription drug costs usually reach the catastrophic phase, these changes will save you money in the long term.

The changes coming to Part D in 2024 will also impact Part D participants in the Low-Income Subsidy (LIS) Program. Starting next year, if your income is at or below 150% of the federal poverty level (FPL), you qualify for Medicare and you meet partial LIS requirements, you’ll be eligible for the Part D LIS Program benefits. This change eliminates the partial benefits currently granted to those with incomes falling within 135% and 150% of the federal poverty level (FPL).

The final Medicare Part D change coming in 2024 deals with the base premium. Next year, your base premiums aren’t allowed to increase more than 6% from the year before. But, as always, your individual Part D plan premium and annual plan-level premium increases might be different.

Medicare Part D in 2025 and beyond 

As with Medicare in general, you can expect Medicare Part D benefits to continue evolving. In 2025, out-of-pocket spending will be capped at $2,000, the coverage gap phase will be eliminated, and Part D plans will pay an even higher share of drug costs in the catastrophic phase. Although these changes might feel confusing, ultimately they’re intended to help by lowering overall out-of-pocket costs and providing you with more robust Medicare benefits.

My Senior Health Plan is here to help. If you have questions about the upcoming changes to your Part D plan, or any other concerns about Medicare coverage, call us at 877.255.6273.


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Pete Blasi