On Aug. 16, 2022, President Joe Biden signed the Inflation Reduction Act. It will bring some major impacts on Medicare in the upcoming years. The announcement is exciting for Medicare beneficiaries that have come about from two years of effort for policy change. Since its inception in the 1960s, Medicare has undergone several changes. The federal program’s ability to adapt and improve over the years is an excellent gauge of its progression.
The congressional effort to lower prescription drug costs has been made official by signing into law. The Inflation Reduction act calls for negotiating Medicare drug costs and redesigning Medicare drug coverage, among other things. Listed below are some of the key provisions of this bill:
In 2024, the Part D catastrophic coverage costs for Medicare beneficiaries will reduce from 5% to $0.
There will be an annual cap for all out-of-pocket costs starting in 2025, and there will be a $2000 annual cap on out-of-pocket expenses for Part D and Medicare Advantage Prescription drug coverage.
All insulins covered by Medicare will have a cap limit of no more than $35 for a one-month supply beginning in 2023.
Also, in 2023, Medicare will begin negotiating prices for some of the most expensive prescription medications currently sold to Medicare beneficiaries.
Medicare’s ability to negotiate drug prices will mean that beneficiares of Medicare will have a greater amount of access to treatments and lower out of pocket costs. The Inflation Reduction Act makes Medicare more accessible, affordable, and more impartial by lowering what Medicare spends for prescription medications and putting a cap on their ability to increase prices.
We hope that this information on the Inflation Reduction Act has been useful to you. To read more about the extended ACA subsidies click here.
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Jose has been a career agent working with Empower Brokerage since 2021 helping clients from all walks of life find tailored solutions for their healthcare needs.