How The Inflation Reduction Act Helps Medicare Beneficiaries
You may have recently read news about the Inflation Reduction Act that was signed into law on August 16, 2022. While there are many aspects to the bill, we want to discuss how the bill could impact you, as a Medicare Beneficiary.
One of the main areas of focus of the Inflation Reduction Act is lowering health care costs for Medicare beneficiaries by addressing prescription costs. Currently, Americans pay 2-3 times more for prescriptions compared to people in other countries. The Inflation Reduction Act aims to close the gap in access to medications. How do they plan to do this?
- Lowering prescription cost:
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- In 2026, Medicare will be allowed to negotiate prices for certain high-priced drugs, directly with the manufacturer. Each year, the list of drugs that Medicare has the ability to negotiate will expand. Currently, the list will be 10 drugs in 2026, 15 in 2027 and 2028, and 20 for each subsequent year. The list of drugs will be published in February of each year.
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- In 2023, certain vaccines, recommended by the Advisory Committee on Immunization Practices (ACIP), will be made available at no cost. (Click here for a schedule of recommended vaccines by age)
- Limiting Out of Pocket Cost:
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- Beginning in 2024 there will be a maximum out-of-pocket spending threshold under the Medicare (Part D) prescription drug benefit. Maximum out of pocket for Part D prescriptions: 2025: $2000
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- Limit the cost-share for covered insulin products to $35 for one month’s supply, Many insurance carrier’s plans already participate in the Part D Senior Savings Model (also referred to as the Insulin Savings Program). The Inflation Reduction Act will require all plans to include this cost-share limitation, and also apply to Part B covered insulins, delivered through covered durable medical devices (typically insulin pumps).
- Expanding Financial Assistance Programs
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- In 2024, Full Extra Help income limitations will be raised to 150% of the Federal Poverty Level (FPL) – in 2022, 100% FPL is $1133/month for a single individual and $1526/month for a married couple.
While these improvements indicate relief ahead for some, we are all feeling the effects of inflation now. Costs are rising daily for basic necessities, but your healthcare costs do not have to increase. We recommend reviewing your Medicare plan options every year to see if a more cost-effective option is available to you. Contact one of our agents to help you determine which plan best fits both your financial and healthcare needs.
References:
https://www.congress.gov/bill/117th-congress/house-bill/5376/text
Subtitle B—Prescription Drug Pricing Reform, PART 1—LOWERING PRICES THROUGH DRUG PRICE NEGOTIATION, SEC. 11001. PROVIDING FOR LOWER PRICES FOR CERTAIN HIGHPRICED SINGLE SOURCE DRUGS. (pages 16-37)
PART 3—PART D IMPROVEMENTS AND MAXIMUM OUT-OF-POCKET CAP FOR MEDICARE
BENEFICIARIES SEC. 11201. MEDICARE PART D BENEFIT REDESIGN. (page 60)
SEC. 11401. COVERAGE OF ADULT VACCINES RECOMMENDED BY THE ADVISORY COMMITTEE ON IMMUNIZATION PRACTICES UNDER MEDICARE PART D. (page 79)
SEC. 11404. EXPANDING ELIGIBILITY FOR LOW-INCOME SUBSIDIES UNDER PART D OF THE MEDICARE PROGRAM. (page 82)
SEC. 11406. APPROPRIATE COST-SHARING FOR COVERED INSULIN
PRODUCTS UNDER MEDICARE PART D (page 85)
SEC. 11407. LIMITATION ON MONTHLY COINSURANCE AND ADJUSTMENTS TO SUPPLIER PAYMENT UNDER MEDICARE PART B FOR INSULIN FURNISHED THROUGH DURABLE MEDICAL EQUIPMENT (page 87)
