MEDICARE EXPLAINED: Inflation Reduction Act and the Part D Drug Changes

In this article, we are going to be exploring the Inflation Reduction Act and what that means to your pocketbook for your prescription medications under Medicare Part D. Recently, the government passed a piece of legislation called the Inflation Reduction Act, and it has some important provisions on Medicare Part D prescriptions.


1. Insulin Related Medicine Cap

This has really been a struggle because insulin is vital for people that have diabetes, and it has been so expensive. Starting January 1, 2023, covered insulins under Part D are going to be capped at a copay of $35 per month.

2. Catastrophic Phase Co-Pay/Co-Insurance

In the four phases that you go through in a Medicare Part D plan, the last phase is called the “Catastrophic Phase.” You might have noticed if you ever hit that phase, you are still paying a co-pay or co-insurance after having forked over a ton of money during the other phases. Well, good news is coming in 2024 because the government is going to eliminate any co-pay or co-insurance on Part D medications within the Catastrophic Phase.

3. Extra Help/Low-Income Subsidy Qualification

If you have tried to qualify for Extra Help (aka, Low Income Subsidy) to reduce prescription costs for those that are lower income, there is good news coming. The government is expanding the parameters to include folks whose resources earn less than 150 percent of the poverty level starting in 2024. That means, more people are going to qualify for this important program.

4. Out-of-Pocket Max

In 2025, the legislation establishes a yearly out of pocket max under the Part D Drug plans. So, if you have been paying thousands and thousands of dollars each year because your prescriptions are expensive, starting in 2025, the government is going to cap out-of-pocket costs under Part D at $2,000.

5. Manufacturer Negotiation

The government is now, for the first time, going to start directly negotiating with manufacturers on Part B and Part D drugs. They are going to use their negotiating power to try to lower the cost that you will have to pay for these drugs. This process is going to phase in over time. In 2023, Medicare is going to announce ten prescriptions that are going to be negotiated, and the results will go into effect in 2026. Then, every year, Medicare will add new drugs to the negotiations.


So, that wraps up what is important for you to know about the Inflation Reduction Act and what is going to help your pocketbook under your Part D prescription plan in the coming years.


If you need help on your specific Medicare situation or have questions, give me a call at 1-800-419-8757 or email me at jwhite@gofouroaks.com. Our services are always free to you!



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