New out-of-pocket cap for drug spending – A provision of the Inflation Reduction Act
Beginning in 2024, Medicare Advantage beneficiaries enrolled in Part D plans are no longer required to pay 5% coinsurance after they reach the catastrophic stage. In dollars and cents, this means they will pay no more than about $3,300 per year for all brand-name drugs.
A recent Kaiser Family Foundation (KFF) poll showed low levels of awareness among older adults about this change and other cost-saving features of the Inflation Reduction Act of 2022. Only about 25% of older adults know about the new cap on out-of-pocket (OOP) prescription drugs that began in January.
To illustrate the impact of Part D’s new OOP cap, KFF considered three drugs – Lynparza, Ibrance, and Xtandi – that treat various forms of cancer. Each has an annual retail price well over $100,000. In 2023, Medicare Part D enrollees who used these drugs for the entire year faced annual OOP costs around $12,000. In 2024, those OOP costs will drop to about $3,300 for each drug. This translates to annual savings of $8,100 to $9,200 compared to 2023.
OOP costs for these drugs will drop even further beginning in 2025 when a $2,000 cap takes effect.
Please make your clients aware of the prescription cost savings available to them as part of the Inflation Reduction Act.
Source: kff.org
