It’s too common to hear – three in ten Americans haven’t taken their medicine as prescribed due to cost. And one in ten say they have cut pills in half or skipped doses because of the cost. Taking blood thinners, cancer medication, insulin, or having a life-saving vaccine shouldn’t be about affordability, yet the numbers say otherwise.
The Inflation Reduction Act was enacted in 2022, and millions of people with Medicare are already reaping the savings and benefits. But are you? If you’re unaware of the new prescription drug and vaccine benefits, you could lose out on critical benefits and savings. Changes to Part B, Part D, Medicare Advantage, and Medicare Advantage Prescription Drug plans are here.
That’s why it’s essential that you review your healthcare plan benefits every year with a local licensed agent. The best time is during the Annual Enrollment Period, October 15 – December 7. Ensure that you reap the savings others are already taking advantage of – and ensure you don’t miss out on more in the coming years. Here are six ways the Inflation Reduction Act can save you money now and in the future.
One in every three Medicare beneficiaries has diabetes and uses one or more forms of insulin. You may be among them. The 2022 Inflation Reduction Act’s $35 cap makes most insulin more affordable for many people covered by Medicare. If you take insulin and you’re not enrolled in Medicare Part D’s Extra Help, this is the help you sought.
Before this policy, Medicare Part D insulin users paid an average of $54 out-of-pocket per prescription. Because many Part D formularies placed insulin as a tier-three medication, some paid $100 or more on coinsurance per prescription. Starting in 2023, most people now pay a $35 monthly copayment for insulin. This is a savings of between $19 and $65 or more per month. Savings can be seen in Medicare Part D and Medicare Advantage Prescription drug plans.
Have you ever received a vaccine you thought Medicare covered – only to find out you had to pay coinsurance? Many have and with great frustration. That’s because some vaccines are covered under Medicare Part B, while some with Medicare Part D. And Part D hasn’t offered common vaccines without cost-sharing.
Starting in 2023, the Inflation Reduction Act made vaccines covered under Medicare Part D and recommended by the Advisory Committee for Immunization Practices (ACIP) free, without any co-payments or deductibles to meet.
Eliminating cost-sharing will lower out-of-pocket costs for vaccines such as shingles, Tdap (tetanus, diphtheria, and pertussis, also known as whooping cough), hepatitis A, varicella, meningococcal ACWY, meningococcal B, Haemophilus influenzae type b, among others.
Before the Inflation Reduction Act, with Part D, it would cost at least $100 out-of-pocket to get the shingles vaccine. Now, there isn’t an out-of-pocket cost. The ACIP recommends influenza, shingles, Tdap, COVID-19, and pneumococcal vaccines for anyone 65 and older. Consult with your doctor to determine which vaccines you should be up-to-date on.
Ever sticker shocked by your Part B medication coinsurance? If you’ve ever needed medicines to treat cancer (Rituximab, Nivolumab, Pembrolizumab ), organ transplants, chronic kidney disease, macular degeneration, macular edema, or diabetic retinopathy (Eylea), you know how much medications can rise year to year. With Part B, the coinsurance for these medications is 20% unless you have a Medicare Supplement plan. Costs with a Medicare Advantage plan can vary.
“It’s even more critical to review your plan annually. Because the Inflation Reduction Act is bringing new benefits and savings for the next several years.“
The Inflation Reduction Act set out to control the price gouging of pharmaceutical companies. Instead of allowing for steep cost increases, those Part B medications, and nearly all covered drugs under Part D, that increase faster than the rate of inflation (CPI-U) will be required to provide a rebate to Medicare. Now, instead of paying the manufacturer’s listed price, you will pay Part B coinsurance at the drug’s lower inflation-adjusted price, not the gouging price of the manufacturer. Some seniors are already saving up to $449 in lower coinsurance this quarter thanks to the new Medicare inflation rebates.
More than 34 Part B medications have been identified as rising faster than inflation, and the Centers for Medicare and Medicaid Services (CMS) will identify the Part D medications later this year. According to KFF’s analysis, around 50% of prescription drugs covered by Medicare experienced list price hikes that surpassed inflation levels.
If you take a high-cost prescription medication, Medicare Part D’s benefit redesign and out-of-pocket cap may be of great financial benefit to you. The catastrophic spending threshold can be met due to only one high-priced brand or specialty medication to manage cancer, hepatitis C, multiple sclerosis, and other medical conditions. If you take a high-priced medication and are enrolled in Part D, you’ll likely see substantial out-of-pocket savings from these changes.
Beginning in 2024, Medicare Part D will eliminate the 5% coinsurance for catastrophic coverage and adjust premiums. In 2025, you can look forward to a $2,000 cap on out-of-pocket drug spending. According to KFF, 1.4 million Part D enrollees spent $2,000 or more in 2020, averaging $3,355 per person. This benefit would have saved 1.4 million Part D enrollees at least $1,355, or 40% of their annual out-of-pocket costs, if the cap had been in place in 2020.
Extra Help, also called the Medicare Part D Low-Income Subsidy (LIS) Program, assists people enrolled in Medicare with their Part D prescription drug coverage premiums, deductibles, and cost-sharing. In 2023, Extra Help provides different levels of assistance based on income and asset levels up to 150% of the poverty line. According to CMS, in 2020, 28% of all Part D enrollees received either full or partial Extra Help benefits.
In 2023, if you’re enrolled in Medicare and make up to 135% of the poverty level, you automatically receive full Extra Help benefits – including those enrolled in Medicaid. If you qualify for full Extra Help benefits, you won’t have to pay any premium or deductible for Part D, and you’ll have lower copayments for medications until they reach the catastrophic threshold. After that, you won’t have to pay any extra costs.
If your income is 135% to 150% of the poverty line, you could receive partial Extra Help benefits. With partial benefits, you may or may not pay a Part D premium; you’ll have a lower annual deductible and lower out-of-pocket costs.
Beginning in 2024, the Inflation Reduction Act makes it possible for more individuals to qualify for full benefits. This is applicable if your income is up to 150% of the poverty line and your resources are below specific limits. Under the new law, people with incomes between 135% and 150% of poverty will no longer receive partial benefits. The new law removes the partial benefit for those with incomes between 135% and 150% of poverty.
For the first time, the Inflation Reduction Act allows Medicare to negotiate the prices of Medicare Part D drugs. Over the next four years, the Centers for Medicare and Medicaid Services (CMS) will negotiate prices for up to 60 drugs covered by Medicare Part D and Part B and up to 20 more drugs every year after that.
In August 2023, CMS announced the first 10 medications selected for negotiation – high-expenditure drugs that don’t have generic or biosimilar competition. The lower negotiated prices selected today will go into effect in 2026, and there’s a lot of savings potential.
Of the 10 prescription drugs included in the Medicare drug price negotiations, the average annual out-of-pocket costs were as high as $6,497 per enrollee. The negotiations will result in lower out-of-pocket costs and greater access to medications that treat life-threatening conditions like diabetes, heart failure, and cancer.
If you take one of the following medications, you can expect to save beginning in 2026:
In the coming years, the Inflation Reduction Act will bring significant changes. Whether you’re enrolled in Original Medicare with a Part D plan or you’re enrolled in a Medicare Advantage Prescription Drug plan, you can look forward to increased access and lower costs for medications and vaccines.
With all of the positive changes coming from the Inflation Reduction Act, it’s even more critical to review your plan annually. Because new benefits and savings will become available each year, Medicare Advantage plans will compete for your business, offering greater benefits and lower costs. As Medicare Part D formularies and costs change because of the Inflation Reduction Act, you may be able to find a prescription drug plan that offers you greater benefits at a lower cost.
Be sure to mark the Annual Enrollment Period (October 15 – December 7) on your calendar, especially for the next several years. At Connie Health, we provide unbiased plan reviews at no cost and without obligation. If you move, your health changes, or seek a local licensed agent to walk you through the plan review process, call us at (623) 223-8884. We’re here to support you throughout your Medicare journey.
Read more by David Luna
I am a Spanish-speaking Arizona Life and Health Insurance Licensed Agent and have been helping people with Medicare since 2005. I am a Marine Corps Veteran & former police officer. I enjoy watching football and basketball but hold family time in the highest regard.