Last month Congress passed the historic Inflation Reduction Act of 2022. Some of the many significant pieces of this legislation are a plethora of Medicare prescription drug reforms and protections to shield people from high drug costs. This is great news, and the changes coming will help lower prescription drug costs for all people on Medicare, and especially older adults with low-incomes. Some of the highlights include:
- Capping Medicare Part D out-of-pocket costs for all beneficiaries at $2,000 a year. This will start in 2025 and applies to people in both stand-alone Part D plans and Medicare Advantage prescription drug plans.
- Eliminating the cost-sharing in the catastrophic coverage phase, starting in 2024.
- Starting a new monthly cost-share cap that will give people the option to spread their cost sharing out over the year, beginning in 2025.
- Capping insulin at $35 a month with no deductible, starting in 2023.
- Limiting the annual Part D plan premium growth to no more than 6% for plan years 2024-2029.
- Expanding the Medicare Part D “Extra Help” subsidy by raising the income limit to 150% of the federal poverty level ($20,385/year in 2022).
- Expanding free vaccine coverage for people with Medicare starting in 2023.
- Lowering drug prices by requiring Medicare to negotiate drug prices for certain high priced drugs under Medicare Part d or Part B.
- Requiring prescription drug manufacturers to pay rebates to the government if they raise the price of a Part D or Part B-covered drug above the inflation rate.
- Extending enhanced ACA tax credits for those not yet eligible for Medicare (ages 55-64 years).
For more detailed information, see our partners at Justice in Aging’s recent fact sheet: How Medicare Prescription Drug Reforms in the Inflation Reduction Act Help Low Income Older Adults.