Suzie and Matt at Wenatchee Insurance have been discussing the upcoming changes for months. We view the Inflation Reduction Act as a creator of Big Changes in Medicare Prescription coverage. We see that resources will be limited during the Annual Enrollment Period. Consumers faced with large changes in Medicare Prescription Plans and Medicare Advantage plans looking for guidance for their plan update may feel pressured to take the first plan presented instead of thorough explanations of the updates.
Here’s a quick overview of how the Inflation Reduction Act (IRA) is changing Medicare:
Out-of-Pocket Spending Cap for Part D:
Beginning in 2025, the donut hole is gone. The Inflation Reduction Act introduces a $2,000 annual limit on out-of-pocket spending for Medicare Part D. This is a major difference. This maximum will protect Medicare beneficiaries from excessive drug costs and provide more predictable expenses throughout the year.
Medicare Prescription Payment Plan:
Also starting in 2025, the IRA will implement a new Medicare Prescription Payment Plan. It can be started anytime during the year. This plan allows Medicare beneficiaries to spread out their out-of-pocket costs for prescription drugs over the course of the year, instead of paying large sums all at once. This change aims to make managing drug costs more manageable for beneficiaries, especially those on fixed incomes.
For example, Farmer Fred uses Stelara for his arthritis. It retails for over $20,000 a dose on his Medicare Prescription Plan. It means that the first dose cost will stop at that out-of-pocket maximum and Farmer Fred can choose to make payments on the $2000 (out of pocket maxim remember) instead of everything up front like in previous years.
Medicare Prescription Drug Price Negotiation:
The IRA allows Medicare for the first time to negotiate prices for certain high-cost prescription drugs directly with pharmaceutical companies. The process began in 2023, with the first ten negotiated prices set to take effect in 2026.
The selected drug list for the first round of negotiation is:
Eliquis
Jardiance
Xarelto
Januvia
Farxiga
Entresto
Enbrel
Imbruvica
Stelara
Fiasp; Fiasp FlexTouch; Fiasp PenFill; NovoLog; NovoLog FlexPen; NovoLog PenFill
The next round of fifteen drugs to be negotiated will be announced on February 1, 2025 and their new prices starting January 1, 2027.
Already in effect:
Capping Insulin Costs:
Starting in 2023, the IRA caps insulin costs for Medicare beneficiaries at $35 per month. This cap is expected to provide significant financial relief for those who depend on insulin to manage their diabetes.
Expanded Access to Vaccines:
The IRA ensures that all adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) are available to Medicare Part D beneficiaries with no cost-sharing, starting in 2023. This got vaccines like shingles to Medicare recipiants with no additional cost. The considerable list is here.
These changes reflect a significant effort to make healthcare more affordable and accessible for Medicare beneficiaries, particularly in the realm of prescription drugs.
In July the Centers for Medicare & Medicaid Services released 2025 Medicare Part D Bid Information and Premium Stabilization Demonstration. For the Stand-alone Part D plans, they are going to provide some reassurance and work on lowering some of the forecasted costs. This stabilization has been done before. It was in the early days of the Medicare Part D plans. We will not be able to discuss the individual plan prices until October.
Suzie and Matt are recommending everyone with a Medicare Prescription Plan or a Medicare Advantage Plan with Prescriptions who want assistance double-checking plans to select an appointment now as there are millions of Americans with these plans and a limited number of people who are trained to assist.
Medicare Annual Enrollment Period runs from October 15th through December 7th.
