The passage of the Inflation Reduction Act made a big impact on Medicare Part D. Beginning in 2024, changes were felt by the millions of Americans who rely on the healthcare program. Read on to learn what changes may affect you starting this year.
What is Medicare Part D?
Since 2006, Medicare Part D is prescription drug coverage. Regardless of income, age, or health status, Medicare participants have access to drug coverage through Part D. With the new changes coming, millions of Americans could potentially be saving money on their prescription drugs.
What Is the Inflation Reduction Act?
Passed in 2022 by President Biden, the law aims to tackle inflation and lower medical costs for Americans. Its goal is to make prescription drugs cost less, as well as combat the national deficit and promote clean energy domestically. Its passage is why Medicare Part D is changing beginning in 2024.
Why the Change?
Medicare can now negotiate the cost of drugs with pharmaceutical companies. The Inflation Reduction Act created this allowance. Due to the Medicare Modernization Act of 2003, Medicare could not previously negotiate prices with pharmaceutical companies.
Change Continued…
The Inflation Reduction Act allows the Health and Human Services (HHS) secretary to negotiate drug prices on behalf of Medicare in a tiered method. They are beginning with up to ten prescription drugs negotiated by 2026 and an additional 15 drugs per year until 2028. Then, the HHS secretary may negotiate the prices for up to 20 medications per year in 2029 and beyond.
How Will Part D Change?
Medicare Part D is changing in three big ways. First, Medicare can negotiate drug costs. Secondly, a maximum out-of-pocket cap is set to $2,000. Finally, insulin costs cannot exceed $35 a month for beneficiaries.
Other Changes
Another aspect of Medicare Part D that will be changing is the catastrophic coverage phase. Currently, this phase is known for high costs, especially for those participants with high drug costs.
Catastrophic Coverage Details
However, beginning in 2024, Medicare Part D enrollees will no longer be obligated to pay the 5% coinsurance that is currently required during the catastrophic coverage phase. This change translates to a capped out-of-pocket spending threshold for Part D enrollees. Taking away the 5% coinsurance requirement will save participants thousands of dollars.
Extra Help Changed
Another change coming to Medicare Part D involves the Extra Help program. Extra Help aids low-income participants. These beneficiaries pay nothing for premiums and a fixed copayment for prescription drugs.
New Extra Help
Starting in 2024, Extra Help will be available to more Americans. This program will be expanded to those who fall between 135% and 150% of the federal poverty line and meet the predetermined resource limit requirements.
How to Prepare
Be sure to research your plan options and compare your coverage to ensure you make the most informed decision possible regarding your 2024 Medicare Part D coverage and understand the changes that took place.
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