Recent CMS changes are already saving Medicare members money, and more savings are coming

The Inflation Reduction Act (IRA), passed by Congress in 2022, included many measures designed to expand benefits, reduce drug costs and lower health care costs for Medicare members. Some measures are already benefiting members, while others will roll out in 2025 and beyond. Here’s a brief summary:

What’s coming in 2025

There are three major changes coming in 2025 aiming to reduce how much members on Medicare Part D plans pay annually (these changes only apply to Part D drugs, not drugs covered by Medicare Part B):

• Medicare Part D coverage will have an out-of-pocket maximum of $2,000 for prescription drug costs for the plan year, a drastic reduction from the previous $8,000 maximum.
• The coverage gap (“donut hole”) phase will be eliminated. The coverage gap is the phase you’d enter after you and your plan spent a certain amount on covered Part D prescription drugs during a calendar year ($5,030 in 2024). While in the gap, you’d have to cover 25% of the cost of your drugs. This coverage gap phase will no longer apply since there will be the lower $2,000 out-of-pocket maximum.
• Those with Medicare Part D coverage can opt-in to spread out their out-of-pocket costs for prescription drugs over the course of the plan year. That means rather than paying a large copay for their drugs all at once, Medicare members could opt in to the Medicare Prescription Payment Plan and make smaller monthly installments throughout the year.  As a Medicare Part D member, you’ll have to opt-in to the Medicare Prescription Payment Plan as an additional step upon enrollment into your plan.

What to expect in 2026 and beyond

The IRA also allows the Centers for Medicare and Medicaid Services (CMS) to negotiate directly with drug manufacturers to lower the prices of some of the most expensive brand-name Medicare Part B and Part D drugs. These negotiations are already underway, but they’ll take full effect starting in 2026.

The number of negotiated drugs is limited to 10 Part D drugs in 2026, another 15 Part D drugs in 2027, another 15 Part B and Part D drugs in 2028, and another 20 Part B and Part D drugs in 2029 and later years. The hope is this will significantly help control the cost of these drugs.

Some things already in place in 2024

• Member cost-sharing for Part B and Part D-covered insulin products has been capped at $35/month.
• Advisory Committee on Immunization Practices (ACIP) recommended Part D-covered adult vaccines are now available at no cost for members with Medicare Part D coverage. Here’s a complete list of included vaccines.  
• Full eligibility for the CMS low-income subsidy program (or “Extra Help”) has expanded for those with Medicare Part D. This means that all enrollees who formerly only qualified for partial subsidy are now eligible for the full subsidy, giving them a $0 monthly Part D Premium and a $0 plan deductible.
• Drug companies are required to pay fees to the Medicare Trust Fund if they raise prices for certain Part B drugs faster than the rate of inflation. This will help keep prices from increasing too quickly. The coinsurance Medicare members pay for these Part B drugs will be lowered based on that inflation-adjusted payment amount.

You can learn more on the CMS IRA website.

Y0062_2024IRA_C