Staying Fit

The Inflation Reduction Act of 2022 will transform Medicare’s prescription drug coverage through provisions that for the first time will allow the program to negotiate prices of some medications with drugmakers, cap out-of-pocket costs for beneficiaries and make vital vaccines free to enrollees.
As with many new pieces of legislation, these changes will roll out over time. Here’s a year-by-year look at how and when the landmark legislation will affect Medicare beneficiaries. The benefits of the law will apply both to people enrolled in original Medicare and those who belong to Medicare Advantage plans.

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2023
Vaccines: Vaccines recommended for adults by the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP) will be free to Medicare beneficiaries. Notably, the vaccine for shingles, a two-shot regimen that cost hundreds of dollars, will be available at no cost.
Insulin: Beginning this year and continuing through 2025, copays for a 30-day supply of insulin covered by Medicare Part D will be capped at $35. This copay amount will be in place even if you haven’t yet satisfied your annual Part D deductible. In 2026 and beyond, the monthly insulin copay will be $35 or 25 percent of the medication’s negotiated price, whichever is lower.
Price hike penalties: Pharmaceutical companies will be subject to penalties if they raise their prices more than the rate of general inflation. These companies will have to pay Medicare a rebate for the amount of their price hike that was above inflation. The penalty will apply to all Medicare sales of that particular drug.
2024
Part D out-of-pocket costs: Part D plan members whose drug costs are so high that they enter the catastrophic phase of coverage will not have any more out-of-pocket costs for the rest of the year. In 2024, the out-of-pocket threshold for that coverage phase is $8,000, a limit that generally increases every year. Until 2024, the 5 percent copay for catastrophic coverage will remain in effect.
Part D premium limitation: From 2024 through 2029, Part D plans cannot increase their so-called base premiums more than 6 percent per year. However, the base premium may not reflect the total monthly premium that a plan's enrollee pays. Because plans' costs can vary widely, some enrollees could see a drop in their premiums while others see significant increases. Beyond 2029, it will be up to the secretary of Health and Human Services to determine the premium growth limit.
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