Finance
The new Medicare $2,000 prescription drug cap is coming in January 2025: Here’s everything you need to know
A new program for Medicare members will cap total spending on prescription drugs. Is it right for you?
Thanks to provisions included in the Inflation Reduction Act, seniors enrolled in a Medicare Part D prescription drug plan will have their payments on medications capped at $2,000.00 in 2025. These new rules go into effect in January and could save some seniors thousands of dollars, helping to lower their monthly budgets and keep more money in their pockets.
What you need to know about the new prescription drug program
The new initiative is called the Medicare Prescription Payment Plan and Medicare members became eligible to enroll in October 2024, during the open enrollment period. The program is targeted at seniors enrolled in Medicare with high prescription drug costs as it will enable them to spread “out those expenses over the course of the year.”
How does the program work?
According to the Center for Medicare and Medicaid Services (CMM), the federal agency that oversees these healthcare programs, the law ensures that all Medicare members enrolled in a prescription drug or Medicare Advantage plan have “the option to pay out-of-pocket prescription drug costs in the form of capped monthly installment payments instead of all at once at the pharmacy.”
The Senior Citizens League, a senior rights organization, found that in 2022 when inflation began to plague the US economy, some seniors began to ration their medication as they could not afford their refills. The Inflation Reduction Act aims to lower the cost of healthcare for seniors, which forms a much higher proportion of their budget than younger generations.
Who should enroll in the program?
In the guidance released by the CMM, the agency advises Medicare members and their caregivers to consider enrolling if one has already opted into a Part D drug plan. However, there are other federal programs that one can be enrolled in to lower the cost of prescription drugs. For instance, the CMM reports that those eligible for the Low-Income Subsidy, also called Extra Help, might be able to save more than if they enrolled in the new program.
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