IN AUGUST OF 2022, President Biden signed into law the Inflation Reduction Act (IRA). The law has phases that are intended to reduce the cost of prescription drugs for Medicare beneficiaries through 2029.
The changes that have been implemented include a $35-permonth copay limit for insulin, as long as its covered on the Medicare plan sponsor’s formulary; improved coverage for vaccines; eliminated cost sharing in the catastrophic coverage phase; expanded eligibility for Part D low-income subsidy; and limitation of Medicare Part D plan premium growth to no more than six percent per year.
In 2025, IRA changes are expected to have a greater impact on Medicare beneficiaries. The “donut hole” will be eliminated, and the out-of-pocket maximum for Medicare plan sponsor covered prescription drugs will be capped at $2000. Part D costs will shift from Medicare and the drug manufacturers to the Part D plan sponsors. The change is expected to result in increased plan premiums, reductions in covered medications, and tiering modifications with disruption in pharmacy networks.
Part D plan sponsors must also offer their members the option to opt in to a Medicare Prescription Payment Plan (M3P). Through the new program, your expected annual prescription drug costs will be divided into smaller monthly payments instead of at the pharmacy counter.
The annual enrollment period is October 15 to December 7, with an effective date of January 1.
During this period, a beneficiary can change their Part D plan or Part C plan or return to original Medicare and enroll in a Part D standalone drug plan.
The IRA is a federal law, and beneficiaries need to prepare for any change that could impact how services and medications are obtained.
Medicare Advantage plan sponsors are private insurance companies that are required to offer their members benefits and medications as good as or better than original Medicare. Sponsors are required to provide beneficiaries with their annual notice of change by the end of September. It is important to review the notice to see what changes, if any, may affect benefits—specifically prescription drug benefits.
Have an updated list of prescription medications, including dosage and frequency, to assist in the process of comparing costs and benefits of the plans available in the area.
Medicare Advantage plans consist of Preferred Provider Organizations (PPO) or Health Maintenance Organizations (HMO). PPO plans provide coverage in and out of network while an HMO is more restrictive and provides in-network coverage only—excluding an emergency situation.
Make sure providers and/or facilities are contracted with a plan sponsor prior to enrolling. While assessing available plans, it is important to consider deductibles, copays, co-insurance, and out-of-pocket limits.
Melinda Shinaver is an independent licensed insurance agent and the owner of Compass Care Management, in Oregon. Shinaver is licensed in Ohio, Michigan, and Florida and does not offer every plan available in the area. Any information provided is limited to plans offered in the area. Contact Medicare. gov or 1-800-MEDICARE to get information about all options. ✲
