How the Inflation Reduction Act Means for You and Your Medicare Coverage



Many Americans rely on Medicare for their health care costs. Not only that, but changes that occur to the program can have a significant impact on them. Because of this, it can be important to understand things like the
Inflation Reduction Act and how it will be affecting your health care coverage. While it can seem like a lot to take in, the reality is that the better that you understand how it can impact you, the more prepared you will be for the future, and the easier it will be for you to make healthy choices. 

Changes Are Coming To Medicare

Many of the changes that are coming to Medicare Part D will be related to drug costs. Additionally, these changes are on the way, due to a bill called the Inflation Reduction Act. The idea is that with the passing of this bill, Medicare will have more power to negotiate the prices of drugs. This means that those enrolled in Medicare’s health program may be able to get more affordable prices on their drugs. Beyond getting more leverage to negotiate, there will be other changes, too. Some of these changes include limits on drug costs, and caps on out-of-pocket spending, as well. 

Drug Prices Will Be Negotiated

One of the major points of the Inflation Reduction Act is that it will allow Medicare to negotiate prices for drugs. However, this does not mean that all drug prices will be up for negotiation immediately. Initially, only certain qualifying drugs will be up for negotiation, and they will not begin negotiating until 2026. In many cases, it will be the most expensive drugs that receive little to no competition that will be up for potential negotiation. While this may not make a significant difference in your coverage immediately, if you happen to use one of these more expensive drugs, then you will be noticing lower prices in 2026. 

More Drugs Will Be Covered By All Plans

Another thing that will happen as a result of this bill is that the drug prices that have been negotiated have to be included in Medicare drug plans. In the past, Medicare was not able to set these types of requirements. If you have trouble figuring out whether or not your drugs have had their prices negotiated or whether they are covered, it can be beneficial to contact a
health insurance broker specializing in Medicare so that they can help you make sense of drug costs and whether or not they will be changing. 

There Will Be Caps On Out of Pocket Spending

Another thing that is included in the Inflation Reduction Act is that there will be caps on out-of-pocket spending. As early as 2025, a cap of 2,000 dollars will be placed on out-of-pocket spending for
Medicare Part D prescription drugs. Also, this cap is not fixed and can change depending on Medicare’s spending for that year. If Medicare spends more money on certain drugs, then the limit may rise. Some may not be excited to hear about this. That said, it is important to remember that previously there was no cap on out-of-pocket spending. This means that previously there was no limit on out-of-pocket spending, which could potentially become expensive quickly. 

What this means for those with Medicare Health Plans and specifically Medicare Part D health plans is that in 2025, after they have spent 2,000 dollars, they will not have to pay any more copays or other costs for their drugs. It should be noted that premiums will still have to be paid, and also that the starting rate could raise from 2,000 dollars in subsequent years.

Premium Increases Will Be Limited

Something else to know if you have Medicare Part D is that there will be a limit on premium increases. Beginning in 2024, Medicare Part D plans will not be able to increase by more than 6% each year. So, while your premiums will still be able to increase over time, they will not be able to increase as much as they might have without the limits placed on them. This can help protect you financially, even if you do have to deal with some increases in premium limits over time. 

Some Final Notes

Making sure that you have the right health coverage for yourself and your situation can seem overwhelming at times, especially when new bills are being passed, and new laws are coming into effect. While you may not be able to control these laws or how they impact your health coverage, you can take steps to make sure you’re doing what is best for you. If you have questions about your Medicare health coverage or how changes will impact you, contact
Sackett & Associates Insurance Services at (707) 823-3689 to learn more and get the support that can empower you to make the best healthcare choices.

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