Medicare $2,000 prescription drug cap starts Jan. 1 Leave a comment

Medicare’s $2,000 prescription drug cap will take effect at the start of the new year.

Why it matters: The yearly limit on out-of-pocket payments, under the Inflation Reduction Act, is expected to lower millions of seniors’ medical costs. It will have a particularly significant impact for patients taking expensive drugs to treat cancer and other serious conditions.

By the numbers: Overall, 3.2 million Americans are expected to save money on prescription medications in 2025, increasing to 4.1 million by 2029, per AARP projections.

• Those figures vary by state. In Texas, 9% of beneficiaries are expected to hit the cap in 2025. That figure is as high as 18% in Alaska, per AARP.
• Nearly half of the Medicare enrollees expected to benefit from the spending limit are between 75 and 84 years old.
• • About 1.5 million Medicare beneficiaries spent more than $2,000 on prescriptions in 2021, per KFF. Around 5 million exceeded $2,000 during at least one year between 2012-2021.

  How it works: The cap doesn’t apply to monthly insurance premiums or drugs administered at the doctor’s office or other health care settings.

  • Part D plans have historically not had a limit on out-of-pocket spending, according to AARP.
  • Certain payments made on an enrollee’s behalf, like through the Extra Help program, will count toward the $2,000.

  Zoom out: The Inflation Reduction Act will bring other changes to Medicare Part D, too.

  • It will make insulin available at $35 per month per covered prescription.
  • Enrollees will also have the option to pay out-of-pocket costs in the form of capped monthly installment payments instead of all at once at the pharmacy.
  • The Manufacturer Discount Program will replace the existing Coverage Gap Discount Program. It will require manufacturers to provide discounts on their applicable drugs.

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  Source (Axios News)