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As we head into 2025, there have been significant changes in the realm of health insurance, prescription drug costs, and other health expenses. January kicked off with new political players, executive orders from a new president, and various changes in statehouses. However, for many Americans, the big question is: how will these shifts affect their health-related expenses?
Whether it’s prescription drugs, doctor’s visits, hospital stays, or preventative screenings, the landscape is evolving—and some of these changes may surprise you. Here’s what you need to know about your health costs right now, along with some potential upcoming shifts.
1. Medicare Prescription Coverage Cap at $2,000
A major win for those on Medicare: out-of-pocket drug costs for beneficiaries are now capped at $2,000 annually. This is thanks to a 2022 law that took effect in 2025. The new cap promises financial relief, especially for those on expensive medications.
Additionally, the Medicare Prescription Payment Program allows individuals to spread out their prescription costs throughout the year.
2. Extra Help Program for Low-Income Medicare Beneficiaries
For Medicare recipients with low incomes, the Extra Help program can drastically lower prescription costs. Those eligible may only pay $5 for generic drugs and $12 for many brand-name medications. It’s important to apply if you haven’t already.
3. Preventive Care Remains No-Cost (For Now)
Vaccines, cancer screenings, and other preventive services are still available at no cost for eligible individuals. However, a case heading to the Supreme Court could change this eligibility, so it’s wise to schedule these appointments soon.
4. Health Savings Accounts (HSAs) for High-Deductible Plans
If you have a high-deductible health plan (HDHP), you can take advantage of Health Savings Accounts (HSAs) to stash away tax-free money for medical expenses. For 2025, the deductible thresholds for HDHPs are set at $1,650 for individuals and $3,300 for families. Opening an HSA provides triple tax benefits.
5. Medical Debt Won’t Affect Your Credit (For Now)
A new regulation will ensure medical debt no longer impacts your credit score—starting in March 2025. However, ignoring your bills can still lead to collections, which will hurt your credit if they exceed $500.
6. Beware of Misinformation on Drug Costs
Despite changing political dynamics, several measures under the Inflation Reduction Act remain intact, such as the $2,000 annual out-of-pocket drug cap and the $35 cap on insulin costs. However, misinformation is circulating about potential changes. Make sure you stay informed about what’s actually in effect.
7. Medicare Advantage Plan: Switch Before March 31
If your Medicare Advantage plan isn’t meeting your needs, you can still make changes until March 31. After this deadline, switching may be more complicated. Be careful when considering a return to traditional Medicare, as you’ll need a Part D prescription drug plan.
8. Financial Help for Self-Employed Health Insurance
Those who buy their own health insurance may still qualify for financial assistance with premiums. However, this extra support may disappear in 2026 unless action is taken. In the meantime, keep an eye on potential changes to Medicaid eligibility and financial aid programs.
9. Veterans’ Health Benefits Expanded
Veterans’ health benefits are now available to a broader group of people under the PACT Act, which includes those exposed to toxic substances. The law also expands the use of veterans’ benefits at non-VA healthcare facilities, though prior authorization is still necessary.
10. Drug Coverage Could Change Mid-Year
Even if your insurance previously covered a certain drug, don’t assume it will be the same this year. Insurance companies can change their formularies at any time, introducing new requirements like step therapy or prior authorizations. Always check your insurance company’s formulary for updates.
Disclaimer: The information provided in this article is based on current health policy and laws as of January 2025. Changes to healthcare regulations or policies may occur, so it’s important to stay informed and consult with your healthcare provider or insurance representative for the most up-to-date guidance.
