NAPCA Column 11: Big changes to Medicare’s Part D prescription drug benefit under the federal Inflation Reduction Act (IRA)

Congress recently made some big changes to Medicare’s Part D benefit through the Inflation Reduction Act (IRA). We selected some questions about these big changes and would like to share the information.

Question 1: What Are the Changes to Medicare Part D?

Answer 1: The new rules are designed to make it easier for seniors to afford their prescription drugs. For the first time, the federal government negotiates prices on certain drugs covered through Medicare.

The law establishes annual limits on your out-of-pocket spending for all drugs, with a special cap for insulin. Beneficiaries are also able to spread out their cost sharing throughout the plan year, and you no longer have to pay out of pocket for adult vaccines recommended by the Centers for Disease Control.

Question 2: How will my drug costs be affected?

Answer 2: First, if you use insulin, your spending is now capped at $35 per month. This is great news for many seniors with diabetes, especially those in the Asian American and Pacific Islander community, who are more likely to have diabetes.

Second, starting 2025, there will be a $2,000 annual limit on how much you pay for all prescription drugs covered through Medicare. This means that no matter how many medications you need, your total yearly cost won’t go over $2,000. Note that the annual limit is $8,000 in 2024.

Third, starting next year, you can choose to spread your drug costs evenly over the year instead of paying large amounts all at once. This option could make it easier to manage your budget if you are on a fixed income. But remember, you need to opt-in for this option -- it won’t happen automatically. If you have questions, we encourage you to reach out directly to your Medicare drug plan insurer.

Question 3: Can I receive more assistance with my Medicare prescription drug costs?

Answer 3: Medicare beneficiaries may qualify for even more savings through the Low-Income Subsidy (LIS) program, also called Extra Help program. In 2024, Extra Help is expanded so that beneficiaries who earn between 135% and 150% of the federal poverty level and meet the resource limit requirements can receive full Extra Help benefits.

In other words, if your monthly income is up to $1,903 (or up to $2,575.00 for a couple), you will pay $0 for your Medicare drug plan premium and plan deductible, and a reduced amount for both generic and brand-name drugs. These limits are updated annually.

Question 4: I have heard that the new legislation may impact some of the medications I take -- is that true?

Answer 4: Some experts are worried that the price-setting rules of the IRA could have unintended consequences -- like slowing down the development of new drugs, especially pills that are easy to take at home, and making it harder for seniors to access medicines they currently take.

A balanced approach to implementing the law could help mitigate these access and affordability

challenges. For instance, Medicare officials could monitor insurers to make sure they don’t put certain

brand name drugs into higher cost categories -- which forces seniors to pay more out-of-pocket.

Giving the same level of protection to pills that injectable drugs receive would encourage drug companies to keep developing both types of medicines. This will help ensure seniors can access the best treatments for their personal health needs.

*If you have additional questions about Medicare, Medicaid, Affordable Care Act Health Insurance Marketplace, Social Security Retirement Benefit, Supplemental Security Income, Medicare Savings program, food/home energy assistance, or COVID/Flu vaccination, there are 3 ways you can reach us today:

Call our Senior Assistance Center at:

(English) 1-800-336-2722,

(Chinese Cantonese) 1-800-582-4218,

(Chinese Mandarin) 1-800-683-7427,

(Korean) 1-800-582-4259,

(Vietnamese) 1-800-582-4336

Email: askNAPCA@napca.org,

Mail: 1511 3rd Avenue, Suite 914, Seattle, WA 98101

*National Asian Pacific Center on Aging (NAPCA) is a non-profit organization dedicated to improving the quality of life of AANHPI older adults and their families. We operate a NAPCA Senior Assistance Center for Older Adults and Caregivers and is available in 5 different languages: English, Chinese Cantonese, Chinese Mandarin, Korean, and Vietnamese.