By: John P. Dulczak
This week, President Joe Biden signed The Inflation Reduction Act into law. Based on the initial review of the prescription drug provisions, this is an incredibly positive development for Medicare retirees. Not only will it reduce the prescription drug out-of-pocket costs for Medicare beneficiaries, it will protect plan sponsors, so they won’t have to pay more than a 6% increase per year on Medicare Part D premiums starting in 2024. One of the most significant provisions of the Act will allow the government, for the first time ever, to negotiate pricing on certain high cost drugs.
What You Should Know about the Inflation Reduction Act
- Free adult vaccines covered under Medicare Part D (2023)
- People on Medicare will pay no more than $35 for a month’s supply of insulin (2023)
- Drug companies will be required to pay rebates if drug prices rise faster than inflation (2023)
- Medicare Part D premiums will not increase more than 6% per year (2024-2030)
- Caps out-of-pocket drug costs to $2,000 (2025)
We are still evaluating the legislation and all of the potential impacts for our plan sponsors and retirees. We will be working closely with our carrier partners on implementation activities throughout this process. This is an exciting change for Medicare beneficiaries; it’s not every day that you see legislature passed that will help the financial future of retirees. Please reach out to your dedicated team if you have any questions, we’re always here to help guide you.
The information provided is based on initial review of the language and is not intended to constitute legal advice. We suggest that you consult with your attorney for legal advice and interpretation.