Last updated on January 31st, 2023 at 05:05 pm
The Senate passed the Inflation Reduction Act on August 7, 2022, which has significant provisions affecting Medicare drug prices. In addition, most Part D plans change annually. The changes you may see with your Part D plan include a different premium, deductible, cost-sharing limits, and covered drugs.
Below is a summary of some of the changes you can expect:
Beginning January 1, 2023
- All Medicare-covered vaccines will have a $0 cost share. This includes vaccines like Shingles and Pneumonia vaccines. For a full list of covered vaccines, refer to the Advisory Committee on Immunization Practices (ACIP).
- Insulin included on a Part D plan formulary will be capped at $35 per month and this will not be subject to the plan’s annual deductible.
- Drug makers will be penalized if drug prices rise faster than inflation.
- The Part D deductible, set by CMS annually, will go up to $505 in 2023. This does not mean all plans will have a $505 deductible, but that is the most it can be.
- The projected initial coverage limit will rise to $4,600 (in 2022 it’s $4,430). This limit includes the amount you and your Part D plan pay towards your drugs (the “retail” cost) but does not include the premium. Many people do not reach this limit, but if you have more expensive medications, you may.
Beginning January 1, 2024
- Medicare beneficiaries will no longer have any cost-sharing when they enter the catastrophic coverage phase.
- Currently (in 2022), once an enrollee’s out-of-pocket costs reach $7,050 they have to pay 5% of their prescription drug costs, with no limit.
- Part D Low-Income Subsidy full benefits will be expanded up to 150% FPL.
- Medicare will cap beneficiaries out-of-pocket spending at $4,000. This out-of-pocket limit will include what you pay toward the annual deductible.
Beginning on January 1, 2025
- Medicare will cap beneficiaries out-of-pocket spending at $2,000. This out-of-pocket limit will include what you pay toward the annual deductible.
- Medicare will offer a “smoothed cost-sharing” option which means beneficiaries can opt to have their out-of-pocket costs spread out over the year.
Want to read more about how Part D coverage phases work and impact your out-of-pocket costs? Check out our article Understanding Part D Coverage and Costs.