If you’re one of the more than 49 million Americans enrolled in Medicare Part D, you may feel overwhelmed by your prescription drug costs year over year. A bill currently awaiting consideration by the Senate could bring you some relief in the form of significant savings.
Steadily rising prescription drug costs over time is a growing concern for many Americans who depend on drugs. In fact, one in five seniors on Medicare say they skipped their medications because of the cost, according to a recent survey. Meanwhile, people with health conditions as serious as hepatitis C or certain cancers, for example, often depend on a range of specialty brand name drugs that can easily add up to thousands of dollars.
The bill’s provisions, known as the Cut Inflation Act of 2022, would partly empower the federal government to negotiate the costs of some of the most expensive prescription drugs.
What will this mean for Medicare Part D beneficiaries? Here is an overview of the potential benefits, if the bill is passed:
- For the first time, seniors would pay no more than $2,000 a year for their prescription drugs.
- Medicare beneficiaries who spent more than $7,050 out of pocket on covered drugs had to pay a 5% copayment; this required coinsurance would be eliminated.
- Vaccines would be free for Medicare beneficiaries starting in 2023.
- In addition, pharmaceutical companies that increase the prices of their drugs faster than the rate of inflation would face financial penalties. From 2019 to 2020, half of all Medicare-covered drugs saw price increases above the rate of inflation during this period.
In addition to proposed Medicare drug pricing reforms, the plan also includes provisions on climate change, corporate taxes and energy. If the bill becomes law, drug price negotiations will begin in 2026. The potential savings you realize will vary depending on the type of drugs you take. Decisions still need to be made regarding the specific prescription drugs for which prices would be negotiated. The Senate is expected to vote before the end of August 2022.
Last modification: 08/04/2022