Calhoun County, AL – One of the most stressful decisions my clients face upon reaching age 65 is often which Medicare Part D option to choose. The “Inflation Reduction Act” signed into law by President Joe Biden on August 16, 2022 should result in out of pocket savings for many Medicare participants and make this decision making process a little bit easier. Whether the bill will actually have any effect on bringing down inflation has been politicized and heavily debated. Regardless of one’s stance on the topic of inflation, the bill will bring some changes to Medicare Part D prescription drug plans.
Out of Pocket Costs are Capped
For those with a standalone Medicare Part D plan or a private Medicare Advantage Plan with prescription drug coverage, the maximum annual out of pocket cost for prescription drugs will be $2,000. The 5% coinsurance requirement for participants entering what Medicare refers to as catastrophic coverage will also be eliminated in future years once the out-of-pocket cap has been reached. This cap includes any deductibles as well. Keep in mind that we won’t begin to see the benefits of the cap until they go into effect in 2025.
Premium Increases are Limited
Starting in 2024, Part D premiums will not be allowed to increase by more than 6% per year. These increase caps continue through 2029.
Free Vaccinations
Medicare Part B already covers many vaccinations such as flu shots and pneumonia and coronavirus vaccines and boosters. However starting in 2023, cost sharing will no longer exist for adult vaccines covered under Medicare Part D that are recommended by the Advisory Committee on Immunization Practices (ACIP). The costly shingles vaccine will fall under this new provision in the bill.
Insulin Prices
The cost of insulin in recent years has skyrocketed. Starting in 2023 for Medicare Part D beneficiaries, copays for a month’s worth of insulin will be $35. This will benefit the 3.3 million Americans with Part D coverage that suffer from diabetes.
Negotiated Drug Prices
Starting in 2026, the Centers for Medicare & Medicaid Services (CMS) will begin working directly with drugmakers to reduce the price of prescription drugs in the Medicare program that they consider high cost. The initial target will be the ten most expensive drugs covered under Medicare Part D. This includes Eliquis, which over 2 million Medicare beneficiaries use to help prevent blood clots and four other drugs directly related to sugar regulation or control.
Editor’s Note – Jonathan T. Jones® is a local financial advisor who will be a contributing author for the Calhoun Journal. He will be writing financial pieces to help readers understand the market and many changes that are currently happening in the financial world.
Jonathan T. Jones, CFP®
Wealth Manager/Financial Advisor, RJFS
501 Quintard Avenue, Suite 17
Anniston, AL 36201
256-237-2300
Any opinions are those of Jonathan Jones, CFP® and not necessarily those of Raymond James.
Securities offered through Raymond James Financial Services Inc., member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Wealth and Retirement Services is not a registered broker/dealer and is independent of Raymond James Financial Services.
