What is it and will it impact you?
On August 16th, President Biden signed the Inflation Reduction Act into law. If you’re like many folks, you may have caught a brief snippet on the news, but you likely haven’t had a chance to read the parts and pieces of this new law that impact Medicare. No worries! We’re here to get you up to speed!
Is it good news? Yes! I believe it is, but many changes won’t take effect for several years. Here are just some of the major highlights for those of you on Medicare. To make it easier to explain and understand, let’s break it down by year.
Beginning in 2023
- $0 copay on Part D adult covered vaccinations. Yes, this includes vaccines for pneumonia and shingles which is wonderful.
- $35 cap on insulin for Medicare beneficiaries and will include those who use an insulin pump.
- Drug manufacturers may owe a rebate to Medicare if the cost of their Part B prescriptions outpace inflation in cost.
Those are the highlights in 2023 and I think they’re fantastic! I can think of quite a few clients that will benefit right away from these changes and they start in just a few months!
Beginning in 2024
- Beneficiaries who are at beneath 150% of the federal poverty line will qualify for full extra help with prescriptions coverage. Right now, the income limit is 135%.
- From 2024-2029, the base premium of a prescription drug plan may not increase more than 6%.
- Once a beneficiary reaches the catastrophic coverage phase of a drug plan, their copay will be $0 instead of the 5% that it is today.
Beginning in 2025
- The annual maximum cap on a Medicare prescription drug plan will be $2,000. Please note that this does not include drug premiums.
From 2026-2029
Medicare will be allowed to begin negotiating drug prices! This is a first for this federal program and it should make a difference over time.
Here’s the timeline:
2026 – Medicare can negotiate the cost of 10 part D covered medications
2027 – Medicare can negotiate the cost of 15 part D covered medications
2028 – Medicare can negotiate the cost of 15 part B or D covered medications
2029 – Medicare can negotiate the cost of 20 part B or D covered medications
For 2026, 2027 and 2028 there is an exclusion for negotiations for small biotech drugs, as well as orphan drugs.
For reference, a medication that is administered in the physician’s office is typically billed under part B (exceptions apply) and a prescription you pick up in the pharmacy will be covered under part D.
Will I notice a difference?
If you are insulin dependent or go to receive an adult vaccine you will notice the difference right away! That’s the great news. Although the majority will take years to come to fruition, there is immediate relief in a couple of places that seniors often have difficulty in covering cost.
There was also good news in this bill for those who are in ACA plans and receive subsidy, we’ll go over this portion another time.
As a reminder, check back here often! Our next blog will focus on what you need to do to prepare for Medicare’s Annual Election Period which begins on October 15th.
