The results are suggestive. hat Medicare can be a huge benefit for older adults who struggle to afford high-cost medications for cancer, rheumatoid arthritis and other serious conditions. Those elderly and other American patients Pay two to three times more. for prescription drugs compared to people in other developed countries.
The limit came into effect earlier this year. It’s one of the most consequential provisions in President Joe Biden’s 2022 Inflation Reduction Act, which is designed to reduce high drug prices — along with a new $35-a-month cost of insulin. Hat and Medicare drug price negotiations with manufacturers.
The report found that 94 percent of the more than 1 million enrollees in Medicare Part D are expected to reach the new threshold in 2025 with lower out-of-pocket costs — including premiums and cost sharing. – and will save an average of $2,474. That’s an average 48 percent reduction in their total out-of-pocket costs, according to the report, which analyzed plan enrollment and premium data, among other information.
This 1 million number does not include Medicare beneficiaries who receive a specific Low Income Subsidy And those in the employer. Exemption plans.
Of those one million enrollees, an estimated 62 percent will save an average of more than $1,000 in 2025, while 12 percent will save more than $5,000, the report said. The remaining 6% of Part D enrollees who are likely to reach the new cap will have higher out-of-pocket costs, averaging an additional $268 in 2025, the report said.
Notably, Part D enrollees are expected to reach the contribution limit and reduce their out-of-pocket costs in 2025 by 95% or more in 33 states and Washington, DC.
“When you’re able to provide that kind of savings, it frees up those funds for other really important things that might [patients] Leigh Purvis, principal of prescription drug policy at AARP, said in an interview, “They were having to trade up to pay for their food or rent. Income.”
She added that the median income for Medicare beneficiaries is about $36,000 a year.
AARP said these savings come despite changes to Part D premiums in 2025. Purvis said the new prices for the first 10 drugs selected for Medicare negotiations — and the expected lower prices — won’t go into effect until 2026, so premiums have increased in some cases.
Critics are trying to blame the law for those premium increases and overall higher costs for Medicare enrollees, he said. But the lower out-of-pocket costs will outweigh higher premiums for most patients who hit the $2,000 threshold, the report said.
According to the report, the positive effect will “only increase” as new prices for the first round of drugs take effect in 2026.
“The Medicare program is going to save a lot of money, so it’s really a bigger story than it appears, just because those savings go to a lot of different people in a lot of different ways,” Prouse said. ”
A separate one Report from AARP It found that 3.2 million Medicare recipients are expected to see savings from the out-of-pocket cap in 2025. By 2029, this number is expected to increase to 4.1 million enrollments.
Medicare covers about 66 million people in the U.S., and 50.5 million patients are enrolled in Part D plans, according to 2023 data From the health policy research organization KFF.
The new price limit applies to all prescription drugs covered under Medicare Part D, but does not include drugs given to patients in hospitals or other health care settings such as anesthesia and chemotherapy.
Before the change, people on Medicare typically had to spend $7,000 or more on prescription drugs before they qualified for so-called “catastrophic coverage,” when insurance costs and more of the drug are covered. Covers the cost.
Under this coverage, patients are charged a small co-payment or a percentage of the cost of the drug, usually 5%.