Critter Corner: Will the Inflation Reduction Act Affect Seniors on Medicare?

Dear Angel,

I heard about the Inflation Reduction Act and am hoping it will help Americans during this challenging time. With the rise in cost of everything these days, we can certainly use all the help we can get. What I’m wondering is… how does the Act affect seniors who are on Medicare? Thanks for your help!

Les Monee

Dear Les,

The Inflation Reduction Act, signed into law last year, is expected to have a big impact on older Americans in 2023 as the legislation will reduce the cost of prescription drugs for Medicare participants, according to AARP.

“This law has kind of flown under the radar a bit, and there’s some incredibly important provisions in there that would help those struggling to afford the prescriptions they need,” said Leigh Purvis, AARP’s senior director of health care costs and access.

The law comes with many new and expanded benefits, including free vaccines and drastically reduced cost for insulin.

How the Inflation Reduction Act Will Help Seniors

According to the Centers for Medicare & Medicaid Services (CMS), the Inflation Reduction Act will save money for people with Medicare by improving access to affordable treatments and strengthening the Medicare program. Here’s how:

  • Reduced drug costs & improved Part D coverage:
    • The cost of a month’s supply of Part D-covered insulin is capped at $35, and you don’t have to pay a deductible for insulin. Learn more about this new insulin benefit
    • If you have drug costs high enough to reach the catastrophic coverage phase in your Medicare drug coverage, you won’t have to pay a copayment or coinsurance, starting in 2024.
    • Extra Help affording prescription drug coverage (the Part D Low-Income Subsidy (LIS) program) will expand to certain people with limited resources who earn less than 150% of the federal poverty level, starting in 2024.
    • Your Part D out-of-pocket costs will be capped at $2,000 per year, starting in 2025. You’ll also have the option to pay out-of-pocket costs in monthly amounts over the plan year, instead of when they happen.

“Those almost 60,000 people will now hopefully see significant lower cost sharing because we know a lot of people in Medicare were paying $50 even $100 for their insulin, and now that’s been capped at $35,” said Purvis. “So that’s an important change for insulin and people who need it.”

  • Medicare will negotiate to get you lower drug prices: For the first time, Medicare will be able to negotiate directly with manufacturers for the price of certain high-cost brand-name drugs that don’t have competition. According to the Biden administration, Medicare has been blocked from negotiating prescription drug costs for the past 19 years.
    • This year CMS will announce the first 10 drugs selected for negotiation.
    • Negotiated prices for these first 10 drugs will be effective in 2026.
    • Medicare will select and negotiate costs for:
      • 15 drugs in 2025 (effective in 2027).
      • 15 drugs in 2026 (effective in 2028).
      • 20 drugs in 2027 and every year after (effective each year starting in 2029).
    • Manufacturers that don’t follow the negotiation requirements will have to pay a tax, and will have to pay penalties if they don’t fulfill other manufacturer requirements.
  • Better access to vaccines: People with Medicare Part D drug coverage now pay nothing out-of-pocket for even more vaccines, including the shingles vaccine, which otherwise costs about $280 for both shots.

Hopefully, you will be able to take advantage of some of the savings described!


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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.

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