Medicare Professional and U.S Army Veteran: Jason Kirschner
(941)740-0928
Also Serving: Charlotte, Manatee, Collier Sarasota and Lee Counties
Inflation Reduction Act of 2022
In August 2022, President Biden signed the Inflation Reduction Act of 2022 (P.L. 117-169) into law. The new drug law makes improvements to Medicare by expanding benefits, lowering drug costs, and improving the sustainability of the Medicare program for generations to come. The new drug law provides meaningful financial relief for millions of people by improving access to affordable treatments and strengthening Medicare, both now and in the long run.
Pay Monthly for Medicare Part D Prescriptions Come 2025
What Is Medicare Part D?
Adults who are age 65 and older can enroll in Medicare, a federal health insurance program. If you have signed up for Medicare Part A, Part B, or both, you can also sign up for Part D.
Available through private insurers, Medicare Part D remains optional and covers certain categories of prescription medications. When choosing a Part D plan, review the specific drugs that each plan covers. You may already rely on a particular prescription medication or medications. Take the time to determine whether it appears on the list of drugs covered by any plans you are considering..
To get a better understanding of the wealth of options available for Medicare coverage, be sure to visit the Medicare website.
What is the Medicare Prescription Payment Plan?
In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced that a new Medicare Prescription Payment Plan will start in 2025. Under this plan, all Medicare prescription drug plans, including Medicare Advantage plans, will now offer enrollees the option to spread out their prescription drug out-of-pocket costs over 12 months.
How will it work?
You may have high prescription costs; about one-third of seniors today in fact have trouble affording their medications. Meanwhile, about one in five say they have chosen to skip dosages from time to time to make their high-cost prescriptions last longer.
If you normally pay at the pharmacy at the time you pick up your prescription, you will have another option under the new plan. Come 2025, you can opt to be billed for and pay these costs (capped at a certain amount) over time through your insurer. This is meant to make prescription drugs more accessible and manageable for those who need them most. It will not, however, change the prescription costs.
Starting in 2025, Part D enrollees may opt into the program by contacting their Part D sponsor and completing the Medicare Prescription Payment Plan election process. This is true regardless of whether you have a traditional or Medicare Advantage plan.
What Happens Next?
After enrolling in the plan, your sponsor will notify any pharmacy that fills a prescription of your status, and you will not pay anything at the register. Instead, you will be billed the cost in monthly installments by your plan sponsor.
If you do not pay the billed amount, your participation in the program may be terminated. However, you cannot be terminated from the Part D plan for failing to pay for your prescriptions. In addition, CMS guidance states the sponsor must do the following:
- issue notices for missed payments,
- give a grace period of at least two months for failure to pay the billed amount, and
- create a reinstatement process to allow those enrolled to get back into the program if they can show good cause for failing to make payments.
The Plan May Not Be Right For You
If affording your medication is a hardship and spreading out payments over 12 months would not provide enough reprieve, a more appropriate option may be one of the four Medicare Savings Programs or the Medicare Part D Low Income Subsidy known as Extra Help. Not everyone is eligible for these programs, however, and you must apply for these options.
While the Medicare Prescription Payment Plan may be good news for many, it may not be right for everyone, such as those with low out-of-pocket prescription costs. It is expected that feedback from the public and other interested parties will add some further changes to the proposed Medicare Prescription Payment Plan to help as many people as possible.
Part D Improvements
People with Medicare will benefit from lower prescription drug costs and a redesigned prescription drug program. Benefits include:
- Insulin available at $35/month per covered prescription
- Access to recommended adult vaccines without cost-sharing
- A yearly cap ($2,000 in 2025) on out-of-pocket prescription drug costs in Medicare
- Expansion of the low-income subsidy program (LIS or “Extra Help”) under Medicare Part D to 150% of the federal poverty level starting in 2024
Medicare Drug Price Negotiation
Medicare will be able to negotiate directly with drug manufacturers to lower the price of some of the costliest single-source brand-name Medicare Part B and Part D drugs. This means that people with Medicare will have increased access to innovative, life-saving treatments, and the costs will be lower for both them and Medicare.
Inflation Rebates in Medicare
The new law requires drug companies that raise their drug prices faster than the rate of inflation to pay Medicare a rebate. This will lead to a stronger Medicare for current and future enrollees and discourage unreasonable price increases by drug companies.
Changes to Medicare Part B
Changes in the Medicare Part B program will improve access to high quality, affordable biosimilars for people with Medicare as well as impose a $35/month cost-sharing cap on insulin used in durable medical equipment pumps.
The Inflation Reduction Act makes Medicare stronger for current and future enrollees. It makes health care more accessible, equitable, and affordable by lowering what Medicare spends for prescription drugs and limiting increases in prices.
