When Pam McClure learned she could save nearly $4,000 on prescription drugs next year, “it sounded too good to be true,” she said. She and her husband are both retired and live on a “very tight” budget in central North Dakota.
By the end of this year, she will have spent about $6,000 on medication, including drugs to control her diabetes.
McClure, 70, is one of them. Approximately 3.2 million people The Biden administration's Inflation Control Act of 2022 will limit out-of-pocket medical expenses to $2,000 in 2025 with Medicare prescription drug insurance, according to the Avarere/AARP study.
“It's amazing. Oh my god, I'm really going to live,” McClure said. “We might be able to buy fresh fruit in winter.''
The IRA, the Climate Health Care Act that President Joe Biden and Vice President Kamala Harris have campaigned on as one of their administration's biggest accomplishments, is a part-funding program that covers about 53 million people over the age of 65. Fundamentally redesigned Medicare's drug benefit, known as D. or a person with a disability. The government estimates that the out-of-pocket cap and less publicized changes will save about 18.7 million people about $7.4 billion next year alone.
The annual enrollment period for Medicare beneficiaries is Renew or switch drug coverage Medicare Advantage plans begin October 15th and run through December 7th. Medicare Advantage is a commercial alternative to traditional government-run Medicare that covers medical care and often prescription drugs. Medicare stand-alone drug plans, which cover drugs typically taken at home, are also administered by private insurance companies.
“We always encourage our beneficiaries to take a close look at their plans and choose the option that is best for them,” said Chiquita Brooks LaSure, director of the Centers for Medicare and Medicaid Services, KFF Health News. told. “And it's important that we do that, especially this year because the benefits have changed so much.”
The improvements to Medicare drug coverage demanded by the IRA are the most sweeping changes since Congress added the benefit in 2003, but most voters don't know about it. The KFF investigation revealed that. Some beneficiaries may also be surprised by the downside of increased premiums for some plans.
CMS announced on September 27 that the national average premium for Medicare drug plans has fallen by about $1.63 per month, or about 4%, since last year. “People enrolled in Medicare Part D plans will continue to receive stable premiums and more affordable Part D plan options,” CMS said in a statement.
but, Analysis by KFFKFF Health News, a health information nonprofit organization that includes KFF Health News, says that “many insurance companies are raising premiums,” and major insurance companies such as United Healthcare and Aetna are also reducing the number of plans they offer. I discovered that.
Initial premium proposals for 2025 for many Part D insurers It was even more expensive. To cushion price shocks, the Biden administration has created what it calls a demonstration program that will pay insurers an additional $15 per beneficiary per month if they agree to limit premium increases to $35 or less. .
“Without this substantiation, premium increases would undoubtedly have been much larger,” Juliet Cubanski, associate director of KFF's Medicare policy program, said in an Oct. 3 analysis.
Nearly all Part D insurance companies agreed to this agreement. Republicans have criticized this Question the authority of CMS paid extra and called it an election-year political ploy. CMS officials say the government has taken similar steps with other Medicare reforms, including under Republican President George W. Bush.
In California, for example, Wellcare's popular Value Script plan has gone from 40 cents a month to $17.40 a month. New York's Value Script plan went from $3.70 to $38.70 per month, an increase of more than 10x. It was a $35 increase to be exact.
Cubansky identified eight plans in California that increased their premiums by just $35 a month. A KFF Health News study found that at least 70% of drug plans offered in California, Texas and New York saw their premiums increase, and about half of plans in Florida and Pennsylvania, the five states with the largest number of Medicare beneficiaries. .
Spokespeople for Wellcare and its parent company, Centene Corporation, did not respond to requests for comment. Sarah Baiocchi, Centene's senior vice president of clinical and professional services, said in a statement this month that WellCare will offer the Value Script Plan. without premium in 43 states.
In addition to the $2,000 drug spending limit, IRAs limit Medicare copays to no more than $35 per month for most insulin products and allow Medicare to negotiate prices for some of the most expensive drugs directly with drug companies. I admit it.
It would also eliminate one of the most frustrating features of drug benefits, the gap known as the “donut hole.” This gap causes people to face increased drug costs and at the same time their insurance coverage stops, forcing them to pay the full amount of their insurance benefits out-of-pocket. They reach spending thresholds that vary from year to year.
The law also expands eligibility and increases the amount of “special needs” subsidies for about 17 million low-income people in Medicare drug plans. Pharmaceutical companies will need to pitch in to pay for it.
From January 1, the redesigned drug benefit will operate like any other private insurance policy. Coverage begins after the patient pays their deductible, and next year's deductible will be no more than $590. Some plans have low deductibles, zero deductibles, or exclude certain drugs (usually cheaper generic drugs) from their deductibles.
After a beneficiary spends $2,000 on deductibles and copays, the remaining Part D drugs will be free.
That's because IRAs increase the percentage of claims that insurance companies and drug companies receive. The law also seeks to limit future drug price increases by limiting increases in consumer price inflation. 3.4% in 2023. If prices rise faster than inflation, drug companies must pay the difference to Medicare.
“Before the redesign, Part D encouraged drug price increases,” said Gina Upchurch, a pharmacist and executive director of Senior Farm Assist, a Durham, North Carolina, nonprofit that counsels Medicare beneficiaries. speaks. “The way they are currently designed places more financial obligations on plans and manufacturers, putting pressure on them to help control prices.”
Another provision of the law allows beneficiaries to pay for drugs in installments instead of paying large bills over a short period of time. The insurance company is supposed to do the calculations and send the policyholder a monthly bill, and the bill will be adjusted if drugs are added or removed.
With big changes brought about by IRAs, Medicare beneficiaries need to prepare for the inevitable surprise It happens when insurance companies revise their plans for the new year. In addition to raising premiums, insurers can also eliminate covered drugs and remove pharmacies, doctors, and other services from the provider networks that beneficiaries must use.
If you miss the opportunity to switch plans, your coverage will automatically renew, even if your costs go up or your needed drugs or preferred pharmacy are no longer covered. Most beneficiaries believe that CMS “Special enrollment period. ”
“We have a system that operates through private health insurance plans,” CMS Director Brooks LaSure said. But she noted that beneficiaries “have the ability to change their plans.”
But many people don't take the time to compare dozens of plans that can cover different drugs from different pharmacies at different prices. they will save money. In 2021, only 18% of Medicare Advantage drug plan members and 31% of stand-alone drug plan members will Checked the benefits and costs of the plan KFF researchers found that compared to competitors' products,
For free and unbiased assistance choosing drug coverage, contact your state's Health Insurance Assistance Program at: shiphelp.org or 1-877-839-2675.
KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of KFF's core operating programs and an independent source of health policy research, polling, and journalism. Click here for details KFF.
Subscribe Join KFF Health News for free morning briefings.
