By the GWAAR Legal Services Team
Congress recently passed the Inflation Reduction Act of 2022 (IRA). A major component of the IRA is the reforms made to the Medicare Part D program.
Highlights of the IRA’s changes include the following:
Extra Help/LIS
In 2024, the income limits for Medicare Part D “Extra Help” (also known as the low- income subsidy (LIS)) will be raised to 150% FPL (Federal Poverty Level). This will eliminate the partial subsidy level entirely. However, full-subsidy asset limits will now apply to all beneficiaries.
Out-of-Pocket Costs
In 2023, insulin costs for people with Medicare will be capped at $35 per month with no deductible.
In 2024, cost sharing will be eliminated in the Part D catastrophic phase, effectively capping out-of-pocket costs at the catastrophic threshold.
In 2025, a new monthly cost-sharing cap policy will allow people to choose to spread their out-of-pocket costs throughout the year. This option will also be available to people with Extra Help/LIS.
Vaccines
In 2023, Medicare will cover all recommended vaccines with no cost-sharing for beneficiaries. Specifically, the IRA aligns vaccine coverage under Part B and Part D and eliminates cost-sharing and deductibles for vaccines covered under Part D, such as shingles.
The IRA also improves access to vaccines for adults with Medicaid by requiring coverage of all recommended vaccines, including administration, with no cost sharing and enhancing federal reimbursement to states.
Drug Prices Lowered
Medicare is now required to negotiate the prices of certain high-cost prescription drugs covered under either Part D or Part B.
In 2023, the IRA also requires prescription drug manufacturers to pay rebates to the government if they raise the price of a drug covered by either Part D or Part B above the inflation rate. This inflationary rebate rule is similar to existing rebates in the Medicaid program and its aim is to discourage pharmaceutical companies from making large price hikes.
ACA Marketplace Tax Credits
The IRA extends the enhanced premium tax credits for Affordable Care Act Marketplace coverage for three years (through 2025), which will help older adults not yet eligible for Medicare.
For more information, visit: How Medicare Prescription Drug Reforms in the Inflation Reduction Act Help Low-Income Older Adults (justiceinaging.org)