The Inflation Reduction Act is a new piece of legislation that will make Medicare Part D medications more affordable starting in 2023.
The Inflation Reduction Act of 2022 is a 10-year plan that is reinstating and introducing new tax laws to make things easier for both businesses and individual citizens. This plan has many facets to it, and one of the many changes that will be coming as part of this new legislation is improved pricing for Medicare policyholders that assists in keeping care and medication affordable. Please keep in mind that this is new legislation, and any or all of this information is subject to change once the Inflation Reduction Act is put into law.
Better Part D Coverage
- 2023: The improvements to Medicare Part D coverage include the upcoming cap to out-of-pocket costs for insulin that is covered through this plan. This will be the first major change implemented that is a direct result of the Inflation Reduction Act.
- 2024: If your drug costs reach the catastrophic coverage phase ($7,400 as of 2023), you will not have to pay a copayment or coinsurance. In addition, Extra Help (Part D Low-Income Subsidy (LIS) program) will be extended to individuals “who earn less than 150% of the federal poverty level.”
- 2025: Out-of-pocket costs for your Part D plan will be capped at $2,000, which can be paid in monthly installments rather than when the costs are incurred.
Lower Drug Prices
Beginning in 2023, Medicare will be negotiating lower prices for “high-spending brand-name Medicare Part B and Part D drugs that don’t have competition.” This is an important first step for achieving overall lower costs, especially for vulnerable individuals who require expensive medications that do not have an affordable generic equivalent.
The first 10 drugs to be affected will be announced in 2023, but these lower costs will not come into effect until 2026. Negotiations will continue going forward, expanding this list of medications each year. 15 more drugs will be covered beginning in 2027, and another 15 in 2028. As of 2029, each year will have 20 more drugs negotiated down through this plan. While it’s a move in the right direction, it will be some time before policyholders reap the benefits of these changes.
Vaccines
Beginning in 2023, Medicare Part D policyholders will pay nothing out-of-pocket for more vaccines, particularly those that are recommended by the Advisory Committee on Immunization Practices, which includes the shingles vaccine.
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