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Posted by Jaiden Logan on July 5, 2024

What is the Inflation Reduction Act?

On August 16, 2022, President Joe Biden signed the Inflation Reduction Act. This legislation represents one of the largest American investments in the economy, energy, security, and climate in history. Additionally, it stands as one of the most substantial healthcare laws since the passage of the Affordable Care Act in 2010, which increased health coverage for the uninsured and implemented reforms to health insurance. The IRA proves to be one of the most significant improvements to Medicare since the passage of Medicare Part D in 2003, which ensured prescription drug coverage for all Medicare beneficiaries.

What are the benefits?

The Inflation Reduction Act offers several benefits aimed at increasing accessibility to healthcare.

  • Insulin covered under Medicare costs no more than $35 per month for those with Medicare prescription drug coverage through a Part D plan and those accessing insulin through a Part B plan.

  • Starting on January 1, 2023, adult vaccines including RSV, shingles, tetanus/diphtheria, whooping cough, hepatitis A, and hepatitis B were provided free of charge, alongside flu, pneumococcal, and Covid-19 vaccines covered by Part B.

  • The Inflation Reduction Act established the Extra Help Program which provides assistance to Part D enrollees with limited income and resources. Those eligible for the program pay $0 in premiums and deductibles and receive generic and brand-name drugs at reduced prices.

  • The Act enabled Medicare to negotiate drug prices directly. The first 10 drugs approved include Eliquis, Jardiance, Xarelto, Januvia, Farxiga, Entresto, Enbrel, Imbruvica, Stelara, NovoLog/Fiasp. These drugs are used to treat health issues such as blood clots, diabetes, heart disease, heart failure, autoimmune diseases, and chronic kidney disease.

What changes will go into effect in 2025?

There are two additional changes that will go into effect starting on January 1, 2025. First, out-of-pocket costs will be lowered from an $8,000 to a $2,000 annual cap for people covered by a Medicare Part D plan. Additionally, a Medicare Prescription Payment plan will be introduced, mandating each Medicare prescription drug plan to provide enrollees with the choice to pay capped monthly installments for out-of-pocket prescription costs, rather than paying all at once. The reforms do not extend to Parts A and B of the Medicare Program, which encompasses supplemental insurance and traditional Medicare. However, they apply to all Part D plans, as well as Medicare Part C plans that include prescription coverage.

How does this affect me?

You may be wondering, why is this information important? Or how will this information affect me? If you are covered by a Part D plan and have expensive medications but do not qualify for the Extra Help program, the changes introduced by the IRA in 2025 will have the most significant impact on you as you will experience reduced medication prices. With all the information that you have learned about the Inflation Reduction Act and the upcoming changes in 2025, you might be thinking, “This sounds promising! It seems like I’ll be saving a bit on my healthcare expenses”, but there is a possibility that may not be true.

 Most of the Medicare population is likely to experience increases in premiums, co-pays, and co-insurance to offset the shift in cost responsibility expected in 2025. It is even possible for Part D premiums to double or triple in 2025. Furthermore, there is anticipation of a reduction in drug formularies, which are lists of medications covered by a drug plan.

You should also be aware that the Medicare Prescription Payment Plan is an opt-in choice, and failing to make payments on time could result in the automatic removal from the program for beneficiaries. Also, it's important to clarify that the cap applies only to medications that are covered by the patient’s Medicare prescription drug plan. However, it is mandatory for the cap to cover medications such as immunosuppressants, antiretrovirals, antidepressants, antipsychotics, anticonvulsants, and antineoplastics. Although there are no eligibility requirements, you must have a Medicare Part D plan or be enrolled in a Medicare Advantage program with a prescription drug plan.

What can I do?

The Medicare Annual Enrollment Period opens on October 15, 2024, and closes on December 7, 2024. It’s highly likely that you’ll experience an abundance of information about Medicare from multiple sources and channels. It is crucial for you to schedule a meeting with a Medicare agent to review your Medicare plan thoroughly. This will ensure that you can afford your copays, coinsurance, and plan premiums. Also, pay close attention to any changes in your current plan that may affect the medications.

We wouldn’t want you to experience any unexpected surprises regarding your Medicare. Through Elite Medicare Specialists, you can connect with a Medicare agent now to discuss the upcoming changes in 2025!



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