Three important changes are coming because of a provision in the Inflation Reduction Act of 2022 passed by a Democratic majority Congress. If the majority changes to Republican, the provision will be repealed. How you benefit if it stands:
Medicare Part D drugs $2000 cap
Starting January 2025, the maximum amount anyone with Medicare Part D drug coverage (plans offered by insurance companies) will pay for medications will be $2,000. No more donut hole.
The cap will apply automatically; you do not have to do anything.
Includes traditional Medicare, Medicare Advantage plans and Federal Employee Health Benefits (FEHB) plan.
The cap will apply only to covered medications, meaning those that are included in a insurance company's formulary.
Drug plans must cover every drug in six protected classes: immunosuppressants, antiretrovirals, antidepressants, antipsychotics, anticonvulsants and antineoplastics, and at least two drugs from every other class. The individual will pay full retail price for any noncovered drug.
The cap does not apply to Part B drugs provided as part of a physician’s service or for use with durable medical equipment and generally not self-administered.
The cap starts at $2,000 but it will be indexed annually for inflation.
Prices negotiated between HHS and drug manufacturers
The prices negotiated for ten drugs was recently announced.
Negotiated prices are what HHS will pay to drug manufacturers starting in 2026. Fifteen drugs will be added in each of following years. The United States is the only wealthy nation that does not negotiate prices.
What you may pay depends on multiple variables including what and whether your insurance company passes savings on to you.
Pharmaceutical companies have been fighting this legislation since the Inflation Reduction Act was passed in 2022. They have lost court challenges so far, but there are other suits in the pipeline.
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