Understanding the Inflation Reduction Act and Part D Changes for Medicare Open Enrollment

 Accessia Health hosted the Chief of Staff at the Centers for Medicare and Medicaid Services (CMS), Kristi Martin, for part one of a webinar series focused on some of the most critical changes that will be coming next year in the Medicare space including information on the Inflation Reduction Act, Part D medication costs, and Medicare Open Enrollment. The information below includes highlights from that conversation that will help you make the best decisions during 2024 open enrollment.

Since 2022, when the Inflation Reduction Act (IRA) was signed into law, there have been a number of positive changes within CMS that will make healthcare and prescription drugs more affordable. One of the most anticipated changes that stemmed from the IRA is Medicare’s new ability to negotiate drug prices directly with manufacturers. This historic move is expected to significantly reduce prescription costs for Medicare beneficiaries. For now, individuals can monitor which drugs will have negotiated prices in the coming years, however, the new prices will not go into effect until 2026.

Another important provision in the IRA is the expansion of the Extra Help program, which now provides assistance to individuals with incomes up to 150% of the federal poverty level. As of January 2024, around 300,000 people already benefit from this expanded eligibility.  However, it is projected that nearly three million individuals are eligible but have not yet enrolled. Those eligible for the program have access to Medicare plans with no deductibles, no premiums, and fixed low costs for certain medications. You can find more information on this program as well as check for eligibility here: Medicare – Extra Help.

 

Affordability Enhancements for Insulin and Vaccines

For those who rely on insulin, the IRA recently introduced a monthly cap of $35 for each Part D- and Part B-covered insulin product, starting in 2023. Whether insulin is administered through a pen, syringe, or pump, beneficiaries will not pay more than $35 per month for a month’s supply of insulin covered under Medicare. You can find more information on this pricing here: Medicare – Insulin

Additionally, starting in 2023, adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) are now free under Medicare Part D. This includes essential vaccines such as shingles, RSV, flu, COVID-19, and pneumonia.

 

Out-of-Pocket Caps and Future Provisions

A major relief for Medicare Part D beneficiaries is the upcoming out-of-pocket cap, which will be set at $2,000 annually starting in 2025. This cap on prescription drug costs will be a significant financial help for people who face high upfront medication expenses. If your out-of-pocket spending on covered drugs reaches $2,000 (including certain payments made on your behalf, like through the Extra Help program), you’ll automatically get “catastrophic coverage.” That means you won’t have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year.

Additionally, beneficiaries will also have the option to spread their prescription drug costs over the year through monthly payments, offering greater flexibility and cash flow management. This is an option when considering which Medicare plan is right for you. More information on this option can be found at Medicare – Monthly Payment Option.

 

Preparing for Medicare Open Enrollment

The Medicare open enrollment period begins October 15, 2024, and runs through December 7th. During this time, you can review and adjust your health plans for 2025. To help make the process easier, CMS has a Medicare Plan Finder on their website, which has been updated with a cost preview feature that allows people to compare their monthly costs, with or without the Medicare prescription payment plan. Be sure to leverage this tool to make the best plan decision for your unique needs.

For more information on any of these new updates, you can visit Medicare.gov or call 1-800-Medicare. You can also seek in-person counseling from your local State Health Insurance Assistance Program (SHIP). You can also view the full webinar with all of this information plus more below or tune in to Part 2 of the webinar series, focused on understanding the practical implications of Medicare.