Part D covers the cost of many outpatient prescription drugs. Beginning in 2025, Medicare Part D introduced a $2,000 annual cap on out-of-pocket expenses for prescription drugs, which includes deductibles, copayments, and coinsurance.

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This change offers substantial benefits for individuals with chronic conditions or those requiring expensive medications, who previously faced significant and unpredictable financial burdens. By introducing more consistent annual costs, this reduces the financial strain of costly prescription drug expenses.

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