H.R.5376, Inflation Reduction Act

You have all heard about the Inflation Reduction Act that the President signed into law on August 16th, 2022. However you may not be aware of a few items that may benefit you personally.

The law contains the following provisions/changes to Medicare and other health care items.

• In 2023 copays for a 30-day supply of any insulin that a Medicare drug plan covers will be capped at $35. Part D plans will be required to also comply to the $35 copay limit even if a participant has not met their annual deductible. As of Jan. 1, 2023, folks on Medicare will not have any out-of-pocket costs for vaccines that the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices advise for adults to receive.
• Effective in 2024 and continuing through 2029, Part D premiums cannot increase by more than 6% a year.
• In 2024, the year before the out-of-pocket cap takes effect in 2025 (see next item) Medicare participants will no longer have any out-of-pocket costs if they reach Medicare’s catastrophic coverage. The way catastrophic coverage works in 2022 is that once someone on Medicare out-of-pocket costs reaches $7,050, they pay 5% of their prescription drug costs, with no limit. In 2024, the 5% coinsurance requirement will be gone, and enrollees won’t have to pay anything for their prescription drugs for the rest of the year.
• Beginning in 2025, the amount of out-of-pocket money that Medicare Part D beneficiaries will have to pay each year for their prescriptions will be capped at $2,000. This out-of-pocket limit will apply to prescription drugs through a stand-alone original Medicare Part D plan or a Medicare Advantage (MA) plan for prescription drugs, if a Part D plan or MA plan has a prescription drug deductible that will count toward the cap.
• Also, beginning in 2025 is the requirement that Part D plans offer the option for “smoothed cost-sharing”. This means Part D participants can opt to have their out-of-pocket costs spread out over the year. This is designed to help individuals who could be forced into deciding to fill or not fill a script that has very expensive copay at one time. This provision will allow   someone to spread it out over some months and not take away from other normal every day expenses suddenly.