Medicare Users to Benefit From AARP-Backed Prescription Spending Cap in 2025

When it comes to what they pay for their prescriptions, 2025 promises to be a very happy new year for millions of older Americans enrolled in Medicare drug plans.  Starting Jan. 1, the amount they pay out-of-pocket for their medications will be capped at $2,000 a year, thanks to the 2022 prescription drug cost reform law, championed by AARP.

According to the AARP Public Policy Institute, 94 percent of Medicare Part D enrollees projected to reach the $2,000 out-of-pocket cap will save an average of $2,474.  That’s money directly back into people’s pockets, helping them pay the bills and put food on the table. The new cap will also give folks peace of mind, knowing that there is a limit to what they’ll have to pay — and those payments can be spread out over the year, so they don’t have to pay a big bill all at once. 

This is a big step forward in AARP’s longstanding effort to lower drug prices and make it easier for older adults to afford the medicine they need. More than 95 percent of Americans age 65-plus have at least one chronic condition, and close to 80 percent are living with two or more, like diabetes, arthritis and heart disease. One-third have some kind of cognitive impairment or dementia, and many are fighting cancer or dealing with the debilitating effects of neurological conditions like Parkinson’s, ALS or MS. 

Simply put, prescription medications are a vital lifeline. Older adults and their families cannot afford to keep paying the highest drug prices in the world. 

That’s why AARP led the fight to pass federal prescription drug price reforms back in 2022. In addition to the annual out-of-pocket cap, key provisions of the law include:

• Capping cost-sharing for insulin at $35/month for people with Medicare drug plans
• Making most vaccines free under Medicare Part D
• Allowing Medicare to negotiate drug prices 
• Penalizing drug companies for raising prices higher than inflation

We are committed to ensuring that this law is fully implemented, and we will keep fighting for additional policies — at the state and federal level — that will lower drug costs for older Americans and their families.